Agenda Item GB-3 City of Tacoma Community and Economic Development Department

TO: Planning Commission

FROM: Donna Stenger, Manager, Long-Range Planning Division

SUBJECT: Large Scale Retail Moratorium

DATE: September 28, 2011

At the October 5 meeting the Commission will be conducting its public hearing on the emergency moratorium on large scale retail establishments. Following the hearing, staff will be discussing with the Commission the key issues raised in public testimony received to date. The Commission’s findings and recommendations, which will be drafted for consideration at the October 19 meeting, need to address, at a minimum, the need for and appropriate duration of the moratorium. In support of that discussion, staff is providing a copy of a memorandum provided to the City Council on September 22 regarding the moratorium’s potential impact on certain projects.

Additionally, the Commission will continue its review of the City’s existing policies and regulations applicable to large scale retail uses. Attached for your review are: • Comprehensive Plan Guidance – A summary of existing plan policies relative to large commercial development and development within commercial and mixed-use areas • A few articles and papers regarding large scale retail development, from the State’s Municipal Research and Services Center (additional information and resources are available at the MRSC website – www.mrsc.org/Subjects/Planning/BigBoxRetail.aspx).

At the meeting staff will also be providing additional information about current development and design standards, including how they have applied to recent developments within the commercial and mixed-use districts where these types of uses are permitted and generally located.

If you have any questions, please contact Brian Boudet at 573-2389 or [email protected].

Attachments c: Peter Huffman, Assistant Director

747 Market Street, Room 1036 ▌ Tacoma, Washington 98402-3793 ▌ (253) 591-5365 http://www.cityoftacoma.org/planning

LARGE SCALE RETAIL MORATORIUM

COMPREHENSIVE PLAN GUIDANCE October 5, 2011

The following is a sampling of policies and goals from the Comprehensive Plan specifically related to large commercial retail development, including policies from the Generalized Land Use Element (LU) related to the districts and areas in which those types of uses are commonly found. It should be noted that this is only intended to provide a representation of the key policy messages related to this type of development and the areas where it is generally allowed. More detailed information and additional policies can be found throughout the sections indicated, as well as in other elements of the Plan.

COMMERCIAL DEVELOPMENT (PAGES LU‐54 – LU‐60) General Themes: • Human‐scale, pedestrian access, non‐motorized circulation • Public squares and assembly points for community activities • Distinctive place based on the combination of history, natural environment, and people • Range in scale from small neighborhood convenience shops to regional shopping centers

Specific Policies and Goals: Commercial Development – Goal (LU‐54) To achieve an attractive, convenient and well‐balanced system of commercial facilities, which serve the needs of the citizens, are appropriate to their relative service areas and are compatible with adjacent land use.

Location and Accessibility – Intent (LU‐54) Commercial development involves a wide variety of uses and can range in scale from small neighborhood convenience shops to regional shopping centers.

Commercial areas are the activity centers of the community. Commercial areas should be safe, well designed, appropriately scaled, and integrated into the fabric of the community.

Commercial establishments must be properly located and easily accessible for the convenience of their customers. Commercial developments should be located within mixed‐use centers, in concentrations within areas of similar character, or in nodes at intersections of major traffic corridors. Such locations should lessen traffic congestion, increase consumer convenience, reduce utilities and services installation and maintenance costs and encourages joint use of parking facilities.

Infill development and intensification of existing commercial areas will aid their continued economic viability. In some limited instances, physical expansion of existing areas may be permitted; however, linear expansion is to be strictly limited.

Commercial development within the mixed‐use centers is also guided by policies in Section II specifically addressing the centers. For development within the centers, where center policies are inconsistent with the policies below, center policies take precedence.

Design – Intent (LU‐55) The viability of the city's commercial areas is strengthened by promoting quality design and compatibility with the existing and/or desired character of the area. Their viability is further insured by encouraging compact development, the physical maintenance and rehabilitation of existing commercial developments, and beautification efforts.

Design that promotes pedestrian access is a high priority. This can be accomplished by encouraging developments to orient towards the street, and providing attractive pedestrian access between buildings and the street, between separate buildings on the site, through large parking lots, and to surrounding uses, where desirable. Attractive façades, landscaping, lighting, and other amenities are also important to enhancing the pedestrian environment.

Well‐designed vehicular access and parking is needed to ensure the long term health of commercial uses. Such features shall be designed to provide user convenience while minimizing conflicts with bicyclists, transit users, and pedestrians, and minimizing impacts to the visual environment.

Landscaping elements along the edge of the parking lots and within larger parking lots are needed to achieve this goal. Shared use of parking areas is strongly encouraged to encourage compact, efficient commercial centers.

It is intended that the image and appearance along freeway corridors and limited access highways be improved and enhanced by achieving high quality freeway‐oriented development and preserving visual interest. Balance needs to be maintained between preserving visual interests with development economics.

Design standards will be used to help ensure that new commercial developments meet these objectives. Such standards will be easy to use and help to encourage desired forms of development. Design standards may be supplemented with design guidelines for special areas and/or situations. Design guidelines will provide greater flexibility and detail in how commercial developments can meet design objectives.

MEDIUM INTENSITY COMMERCIAL AREAS (PAGES LU‐58 – LU‐59) General Themes: • May contain a mix of retail, office, commercial, multi‐family, and light industrial uses • Includes both concentrated areas of large commercial development with community‐wide significance and older, smaller‐scale districts that focus more on services for surrounding neighborhoods • Encourage locations near residential areas and the development of residential uses within these traditionally commercial districts • Should be located along significant transportation corridors, such as major arterials and freeways, and be designed to include multi‐modal connections

Large Scale Retail Moratorium Comprehensive Plan Guidance 2 • Vegetative buffers and other forms of screening are used to prevent negative impacts to surrounding residential areas

Specific Policies and Goals: Medium Intensity – Intent (LU‐58) Medium intensity commercial developments supply everyday goods and services for several surrounding neighborhoods and are of community‐wide significance. New commercial development should be directed primarily toward mixed‐use centers which consist of a clustered grouping of stores and businesses with multi‐modal transportation access. This arrangement encourages multi‐purpose trips and increases customer convenience.

Planned business parks are a relatively new type of concentrated commercial development. Because of their relatively nuisance‐free nature, planned business parks may be compatible with adjacent lower intensity residential areas provided the character of the area is maintained.

Older commercial development is usually found in small‐scale linear districts. These districts generally consist of a continuous row of commercial establishments along key arterial streets, which were historically used as principal entry routes to the downtown business area. This type of commercial development does not have the drawing power of a major retail store, but provides convenience and services to surrounding neighborhoods. Parking is provided on street and in small lots, generally located behind or to the side of the commercial building. Upper stories were often used for housing in the past and such use is desirable for the future.

Medium intensity commercial developments require access to higher volume arterial streets that are capable of carrying the traffic that is generated by these developments. These developments should be located within easy access to the residential communities that they serve. Methods to minimize adverse effects on adjacent, less intensive land uses and transportation levels of service are needed. This can be accomplished by encouraging shared parking arrangements, providing buffers, using design standards and encouraging public transit use.

Medium Intensity Commercial Development – Policies (LU‐59) LU‐CDMI‐1 Concentrated Centers of Development Encourage medium intensity commercial developments to locate in concentrations to maximize the use of land, promote the efficient use of public services and facilities and to minimize adverse influences on surrounding properties. LU‐CDMI‐2 Locate Near Residential Areas Medium intensity commercial development should be conveniently located near the residential areas that they serve. LU‐CDMI‐3 Arterial Street Location Medium intensity commercial developments should be situated on either principal or minor arterial streets or at the intersection of two arterial streets having adequate capacity. LU‐CDMI‐4 Linear Commercial Expansion Strictly limit the linear expansion of development. LU‐CDMI‐5 Freeway‐Oriented Commercial Development Locate freeway‐oriented commercial facilities at locations convenient to the freeway user provided the facilities do not impede nor impair traffic.

Large Scale Retail Moratorium Comprehensive Plan Guidance 3 LU‐CDMI‐6 Office, Medical Institutional Uses Allow moderately scaled office, medical and institutional complexes within medium intensity areas, provided adverse effects on surrounding areas are minimized. LU‐CDMI‐13 Encourage Residential Development Encourage residential development to locate within medium intensity commercial areas.

MIXED‐USE CENTERS (PAGES LU‐20 – LU‐39)

General Themes: • Compact, self‐sufficient areas with high density and a well‐integrated variety of uses • Emphasis on public transit access to services and facilities • Create comfortable and safe walking districts that are transit‐supportive • Shopping and services near home and work and employment opportunities for living near work • Walkable, comfortable, and accessible public spaces • Strong neighborhood identity, enhancement of existing assets, support of neighborhood businesses • Increased vegetation and greenery for effective buffers and scale transitions • Retain major employers, support small business and achieve development feasibility

Specific Policies and Goals: Mixed‐Use Centers – Goal (LU‐20) To achieve concentrated centers of development with appropriate multimodal transportation facilities, services and linkages that promote a balanced pattern of growth and development, reduce sprawl, foster economies in the provision of public utilities and services, and yield energy savings.

Mixed‐Use Centers – Policies (LU‐21/22) LU‐MU‐1 Pedestrian and Bicycle Support Situate and orient developments, locate building entrances and design building façades to enhance the convenience and desirability of walking and bicycling. LU‐MU‐2 Variety of Development Encourage as broad and as balanced a range of development as possible including shopping, housing, offices, restaurants, hotels, recreational facilities, entertainment, public facilities and others, to meet the needs of all segments of the community, especially youth, seniors, the disabled, and families. LU‐MU‐3 Mixed‐use Development Encourage integration of different land uses within the same building or site in order to maximize efficient land use, foster a variety of developments, and support multimodal mobility. LU‐MU‐4 Development Bonuses and Incentives Provide a range of development incentives and bonuses in order to encourage specific types of development as well as public benefits. Incentives may include reduced parking requirements, fee waivers, height increases, density bonuses, property tax exemptions, capital improvements, and other techniques.

Compact Development – Intent (LU‐22) To encourage walking and cycling, mixed‐use centers will be compact to allow people to comfortably walk between destinations within the center. Comfortable walking distances are generally considered

Large Scale Retail Moratorium Comprehensive Plan Guidance 4 800 to 1200 feet. Achieving compactness will hinge on the ability to concentrate development. Encouraging more development while maintaining compactness will contribute to densification and intensification of the center. Greater densities and intensities support efficient public transit. Investment in maintenance and improvement of infrastructure and services is needed to support intensification of uses.

The designated boundaries of the mixed‐use centers shown on the Generalized Land Use Plan Map reflect a desired development vision to be achieved over time. It is intended that mixed‐use development and redevelopment occur within the core areas of the centers first. These core areas shall be regulated by zoning, which permits a wide mix of uses and contains provisions for supporting greater pedestrian and transit orientation. Incentives may also be appropriate for encouraging the type of development desired for these areas. Expansion of the core areas and zoning reclassification to mixed‐ use zoning will be strictly controlled and can not occur unless it is demonstrated that the existing core area has achieved or nearly achieved its development capacity. Expansion of the core area boundaries will be limited; therefore, development should occur predominately upward not outward. Adjustments to the designated center boundaries are intended to be very limited. Defined boundaries are needed to assure certainty for those property owners located within and adjacent to a designated center. It is intended that the designated mixed‐use center boundaries and implementing zoning be reviewed and amended or affirmed as part of neighborhood planning efforts.

Parking – Intent (LU‐23) Development within the mixed‐use centers will need to be conservative in its use of surface area, especially for such uses as parking areas. Transitions from center development to surrounding areas will need to be carefully designed to reduce impacts on less intensive land uses.

Large parking areas disrupt the continuity of the streetscape and development pattern, and provide formidable barriers to pedestrian movement. Joint use of parking areas and parking under or within structures should be encouraged to efficiently use available land and allow additional compact development. Parking structures are a good way to achieve compact development; however, these structures need special design considerations to avoid blank walls and conflict of entrances or exits with pedestrian walkways.

Design – Intent (LU‐26) Design will play an important role in achieving successful, compact, dense development in Mixed‐Use Centers. Good design will contribute to building a sense of community and neighborhood livability. Attention to both the existing and desired context will be critical in these centers. Thoughtful and context sensitive design will produce development that is compatible with surrounding development whether the site is on the edge of a Mixed‐Use Center and adjacent to a single family area or along a designated pedestrian street in the middle of a center. Buildings within the centers will use forms that are attractive at all perceivable ranges. Development at the edge of centers will utilize a combination of landscaping, building location and orientation, and building design to lessen negative impacts on adjacent uses.

Due to the concentrated nature of development in these centers, it is essential that new development be friendly to the pedestrian. To achieve inviting and walkable centers, new developments will be oriented to the street, feature wide and attractive sidewalks with street trees, lighting, and other amenities, and interesting building façades with plenty of transparency and distinctive details. Larger developments will provide an internal pedestrian network that will provide connections between buildings, to the street, and to adjacent uses, where practical. Design that encourages bicycle usage will

Large Scale Retail Moratorium Comprehensive Plan Guidance 5 also be increasingly important in the future. These features will also improve access to transit in the centers by its residents, workers, and visitors.

Public plazas and open spaces are also very important to the character and livability of these centers. It is intended that these centers accommodate a variety of publicly accessible spaces from centralized plaza spaces, to small courtyards, and passive green spaces. Such spaces are most successful when they are integrated with the surrounding development. Integration enhances the desirability of both the development and the open space, ultimately making both safer and more accessible. Other design elements that are key to retaining and enhancing the livability of the Mixed‐Use Centers include a mixture of uses (including a diversity of housing types and retail uses), design continuity (emphasized through common streetscape design elements that are distinctive for each center), solar access (particularly for residential uses), durability (use of quality materials that will last and reduce long term maintenance costs), sustainable design (emphasizing a variety of landscaping components and increased energy efficiency of developments), and provisions for private open space for residential uses (through a combination of yard space, balconies, shared courtyards, and rooftop decks). In order to accomplish these objectives, a combination of design standards and guidelines are to be used. Design standards that are clear and easy to use and interpret will be used by all new development. Design guidelines are a tool that may be used in special circumstances to help achieve Mixed‐Use Center design goals in a way that allows some flexibility.

URBAN CENTERS – TACOMA MALL AREA (PAGES LU‐35 – LU‐37) General Themes: • Transition to pedestrian‐oriented urban neighborhood with considerably less surface parking • Dense concentration of urban development • Activity is greater than in most areas of the city • Area of regional attraction • Focus for both the local and regional transit systems and nearby freeway access • Provision of parking on surface lots and within structures • Internal streets and pathways provide connections among developments

Specific Policies and Goals: Urban Center – Intent (LU‐35) Although not as dense as downtown, the urban center is to be a highly dense concentration of all types of urban development thus establishing it as an attraction for the region and city. Efficient transportation links to the regional and local transit systems as well as to the freeway and major city arterials are necessary to support the anticipated development. Sufficient parking also will be necessary and should be provided primarily within structures and in limited surface lots. Pathways are important within the center to provide adequate access for pedestrians to travel safely and easily among the developments within the center. This center type was further defined in the 2007 mixed‐use center analysis in order to better direct design and development character and application of development bonuses and incentives.

The urban center is a designated growth center for the Central Puget Sound Region and is intended to accommodate regional population and employment growth. It is recognized that this area presently is developed with large shopping malls, supportive commercial uses, some office development and a mix

Large Scale Retail Moratorium Comprehensive Plan Guidance 6 of residential uses. It is anticipated that, over time, the urban center will redevelop to resemble environments normally associated with downtown areas of mid‐sized cities. This will involve development of better circulation links, orientation of buildings to street fronts rather than parking areas and the integration of high density residential uses.

Employment density is expected to be about 25 employees per gross acre of the urban center.

Urban Center – Policies (LU‐36/37) LU‐MUUC‐5 Street Networks Identify and address existing deficiencies in the street, sidewalk, and trail/bicycle path network of urban centers; the average block size should be no more than 300 feet to ensure a finer grain network of streets and routes for pedestrian/bicycle access when redeveloped. LU‐MUUC‐7 Compact Form Establish and maintain a compact size and walkable urban form for urban centers. LU‐MUUC‐8 Mix of Uses Promote an enhanced mix of complementary land uses in urban centers that promotes pedestrian activity and provides housing, employment, services, and amenities to persons living and/or working in the center or nearby. LU‐MUUC‐9 Single Commercial Use Limit Establish a maximum building size for commercial use buildings, and require commercial buildings above that size to have multiple stories and include residential uses at a minimum density that helps to meet Regional Growth Center criteria. LU‐MUUC‐10 Tacoma Mall Subarea Planning Prepare a subarea plan for the Tacoma Mall urban center that accomplishes the following objectives: • Meets the Regional Growth Center criteria for targeted activity levels for employment and housing; • Establishes the desired urban form, building, and related site design standards; • Defines average block size, future “complete streets,” the public street network, and on‐site streets (“Complete streets” include safe facilities for pedestrians, bicycles and transit in addition to vehicles.); • Further defines the appropriate mix and scale of land uses; • More specifically defines market potential; • Defines center nodes and public spaces and the relationship of these components to transit; and • Plans for other aspects of phased redevelopment to achieve the Regional Growth Center criteria. LU‐MUUC‐11 Site Plan Review Process for Urban Centers Establish a binding site plan review process to apply to infill, development and redevelopment of site and buildings meeting certain criteria, to encourage the urban center to transition over time to a finer‐grained, pedestrian‐oriented mixed‐use urban neighborhood with considerably less area devoted to surface parking. The binding site plan review process should apply to all new development and to renovations equal to 50 percent or more of existing building value. • Large sites: Require master planning for sites of five acres or greater or buildings of 45,000 square feet or greater, with a maximum block size of 360’ x 360’, and phased planning for vehicle and non‐motorized circulation, a mix of uses, and structured parking. • Medium sites: Require a site plan for sites of one to five acres or buildings of 20,000 to 45,000 square feet, which defines pedestrian circulation, vehicle circulation, and building and parking placement. • Small sites: Sites less than one acre or buildings less than 20,000 square feet should not be subject to site plan requirements.

Large Scale Retail Moratorium Comprehensive Plan Guidance 7 COMMUNITY CENTERS (PAGES LU‐37 – LU‐38) General Themes: • Focus for larger scale commercial development • Attractions that draw people from throughout the city • Promote more residential development infill around existing shopping centers • Directly accessible by arterials and local transit • Continue to provide parking, preferably within structures

Specific Policies and Goals: Community Centers – Intent (LU‐37) The community center is to be a concentration of commercial and residential development. Most designated community centers are established commercial shopping areas; therefore, it will be especially important to strongly encourage residential development. Although residential development will increase within the center, larger scale commercial development will continue to be a main focus. For this reason, it will be necessary to continue to provide adequate automobile parking, preferably within structures. The community center should provide a focal point for many nearby neighborhoods and may often include a unique attraction that will occasionally draw visitors from throughout the rest of the city. To support this draw, access must be provided to arterials and to the local transit system and sufficient parking must be provided. Oftentimes, the community center will be a major transfer center on the local transit network. As with other centers, pedestrian accessibility also should be emphasized within the community center.

Development within community centers will be of smaller scale and less dense than developments within the downtown and urban center but still will be greater than found in areas surrounding the center. As part of the 2007 mixed‐use center analysis, Community Centers were further defined into two typologies – Urban Crossroads and Employment Centers – as a means to characterize the centers according to urban form, existing assets, future desired character and vision, desired land use mix, and phasing of development, and to identify appropriate development bonuses and incentives.

Urban Crossroads are community centers that consist primarily of commercial development focused at intersections of major arterials or highways. These are areas where a greater mix of uses, including significantly more residential uses, is desired.

Employment Centers contain one or more major institutions surrounded by ancillary and support services. These areas will likely continue to be a focal point for employment; however, a greater mix of uses is desired.

Community Center – Policies (LU‐36/37) LU‐MUCC‐1 Public Transit Support Integrate major collection points for local public transit within designated community centers. LU‐MUCC‐2 Variety of Development Build on existing assets and strongly direct housing and other types of non‐commercial development into community centers in order to diversify and achieve a balance of uses with existing commercial and institutional development.

Large Scale Retail Moratorium Comprehensive Plan Guidance 8 LU‐MUCC‐3 Site Plan Review Process for Community Centers Establish a binding site plan review process to apply to infill, development and redevelopment of site and buildings meeting certain criteria, to encourage the community centers to transition over time to a finer‐grained, pedestrian‐oriented mix of uses with considerably less area devoted to surface parking. The binding site plan review process should apply to all new development and to renovations equal to 50 percent or more of existing building value. • Large sites: Require master planning for sites of five acres or greater or buildings of 45,000 square feet or greater, with a maximum block size of 360’ x 360’, and phased planning for vehicle and non‐motorized circulation, a mix of uses, and structured parking. • Medium sites: Require a site plan for sites of one to five acres or buildings of 20,000 to 45,000 square feet, which defines pedestrian circulation, vehicle circulation, and building and parking placement. • Small sites: Sites less than one acre or buildings less than 20,000 sq. ft. should not be subject to site plan requirements.

Large Scale Retail Moratorium Comprehensive Plan Guidance 9

Big-Box Stores Slim Down for Urban Settings May 29, 2008 By C.J. Hughes

Attribute it to empty-nest syndrome, falling crime rates, or rising gas prices: suburbanites are downsizing to apartments and condos located near theaters and cafes on walkable downtown blocks in San Diego, Milwaukee, Atlanta, and other cities nationwide.

Big-box retailers are in hot pursuit, eager to grow beyond their longtime suburban locations to tap these emerging markets. But the traditionally sprawling floor plates of these stores aren’t a good fit for densely settled urban areas. So, architects are laying them out more up-and-down than left-to-right—with more floors, less parking, fewer signs, and more glass facades—even if that means breaking with the look that once helped define the store’s brand. “Big-box retailers across the country are becoming substantially more flexible about what kind of box they can use,” says John Bemis, an Atlanta-based director of Jones Lang LaSalle Retail, a national real estate firm. A decade ago, one percent of big-box stores were in cities, but today that figure is up to five percent—about 90 current stores, with more planned—Bemis says, “and future growth will be exponential from here on in.” Going vertical Photos courtesy Target Corporation means making do with less square footage. In urban settings, big-box retailers are building slimmer stores with multiple levels, which can put off customers For example, Circuit City’s new “The City” used to shopping with carts. Architects for Target faced format, designed in-house, shrinks its size by that problem with its store in Glendale, California, which at three stories is the chain’s tallest (above). Their solution 42 percent, to 20,000 square feet from 34,000 was to reconfigure the escalator banks. There are still square feet; 18 were open by March, says Jim traditional sets of moving stairs for people, but next to Babb, a company spokesman. them runs a special dedicated lift system for carts (top).

Making sure that size reductions don’t result in the loss of too many signature interior design details can be a tough task for architects. Eric Lagerberg, a principal of Callison, the Seattle- based firm, recently completed a prototype for Cabela’s, the outdoors outfitter, whose new 85,000-square-foot two-level stores will measure less than half of their 200,000-square-foot one-level forerunners. However, the prototype retains Cabela’s distinct Adirondack-cabin mien. Interior ponds, now smaller, will be consolidated into one corner; taxidermy pieces will glower closer to the front door. Though they’re shedding muntins, windows will still have heavy wood frames, and entry gables will replace porte-cocheres. “I had to decide what was important and how important was it,” Lagerberg says. “There still needs to be continuity across the whole.” Even if a store looks the part, though, its multiple levels can put off customers used to shopping with carts, retailers say. Architects for Target faced that problem at the department store’s year- old outpost in Glendale, California, which at three stories is the chain’s tallest. Their solution was to reconfigure the escalator banks in the 180,000-square-foot facility, which formerly housed a Robinsons-May department store. There are still traditional sets of moving stairs for people, but next to them runs a special dedicated lift system for carts. Also, store officials point out, the russet-colored glass-block-detailed building also benefits from parking-garage entrances on two floors, which helps funnel customers to the store’s upper reaches, says Eames Gilmore, an in-house architect. “We needed to make sure the entrances were intuitive,” he said.

Luring people to the store can be made easier if it’s not set back from the street, so as to better catch their eyes, says John Clifford, a principal at the firm GreenbergFarrow. With that in mind, Clifford is eliminating a plaza outside an Atlanta office tower in order to extend the building’s two-story ground-level retail berth toward a major thoroughfare. The design, which enlarges the retail space from 20,000 square feet to 50,000 square feet, also calls for a 40-foot glass facade, he says. Those features should help the owner attract a big-box tenant, which would replace the shoeshine business and dry cleaners currently inside, Clifford adds.

Not every big-box is seeking out cities. Ikea, the Swedish furnishings store, for instance, has largely avoided urban areas, viewing on-site parking as fundamental to its business plan. Even its new outpost in Red Hook, Brooklyn—its first New York City store, and another GreenbergFarrow project—manages to squeeze in a parking lot. “The idea is you buy a chair, carry it out, put it in your car, drive it home, and put it together yourself,” Clifford says. “That’s why we can sell it to you for $14.”

Sept 11, 2005 The Incredible Shrinking Box Retailers shape stores to fit urban settings By David Goldberg Great Lakes Bulletin News Service

In the last few years, a veritable stampede of Americans has returned to city and older suburban neighborhoods, seeking shorter commutes and fun things to do. But they still end up spending Saturdays in the place they tried to leave behind: the newer suburbs.

It turns out that buying a week’s groceries at low prices means schlepping out to where the grocery giants can plant their preferred, massive footprints. The same goes for hardware, building supplies, or household sundries: City folks must que up on suburban expressway exit ramps to buy what they need. That is because, for years, the less-than-preferred demographics and physical constraints of inner-city neighborhoods kept retailers away. Even the older www.fruitvalevillage.net suburbs saw their small strip centers fade as the big chains chased affluence Oakland, Calif., revived its Fruitvale out to the next cornfield. district by converting part of a large transit station parking lot into a creatively designed collection of retail stores, Now, as close-in areas draw new residents, a new generation of mixed-use, offices, and mixed-income housing. higher quality shopping environments is emerging. From Atlanta, where one of the largest redevelopment projects in the city’s history will bring IKEA and a host of other retailers downtown; to Chicago, with the first multi-story Home Depot; to Washington, D.C. and its retail renaissance, major retailers are discovering old and new urban neighborhoods in a major way.

Pushing the change are savvy local government officials who realize that, for urban and inner suburban neighborhoods, attracting major retail stores and mixing them correctly with residential development revitalizes communities. And some retailers are responding by locating their businesses within those communities, not just at the end of expressway ramps.

Such newfound flexibility has implications for cities around Michigan that are trying to either revitalize or protect their downtowns. In order to provide the true walkability that urban dwellers crave, cities as different as Detroit, Grand Rapids, Ann Arbor, Troy, Flint, and Traverse City need many more practical, downtown grocery, hardware, household, and clothing stores.

But the rising interest among chain stores in downtown retail could influence the growing resistance to big-box stores in rural areas, too. For example, after a recent court decision in their favor, a group of residents and elected officials in Acme Township, located just east of Traverse City, are working to convince Meijer, Inc. to drop its proposal for building another cookie-cutter, 232,000 sq. ft. store in the middle of a large field and instead build a two-story outlet, with a parking deck, in the middle of a "new urbanist" town center long envisioned by their township’s master plan for a site across the street. The center would include hundreds of houses, apartments, and condominiums, plus other stores, offices, and a park.

Surprising Signals One of the strongest signals yet of how fundamental the shift in “big-box only” retail doctrine may be came at the International Council of Shopping Centers last December. Robert Stoker, senior real estate manager for Wal-Mart Stores, Inc., declared, “We've reached a stage where we can be flexible. We no longer have to build a gray-blue battleship box.” Mr. Stoker cited several examples of the world’s largest retailer bending its once-rigid design formula to fit into existing neighborhoods, new mixed use developments, and even a high-rise. For the retail development world, it was as though the pope had changed the words in the Lord’s Prayer.

Wal-Mart is not alone in its new willingness to adapt to more urban environments after long refusing to veer from a formula that has held since the 1960s: A single-story building on a major arterial road surrounded by asphalt.

“In 1960, if you had 200,000 square feet of retail, it would have a footprint of about one acre in a multi-story building,” said Ed McMahon, a senior fellow at the Urban Land Institute who has written several articles on commercial design trends. “Until very recently, that same 200,000 feet would be in one story and cover three to four acres, fronted by 20 acres of parking.”

Another large retailer, Target Corporation, was among the earliest to employ a more compact model. The company’s flagship store in Minneapolis has four stories, and the chain has two-story stores with parking structures in Atlanta, Gaithersburg, Md., and other places. Home Depot recently opened a three-story store in downtown Chicago. Wal- Mart has a two-story outlet in a mixed-use setting in Long Beach, Calif., and will soon occupy two floors of a mixed- use high-rise in Rego, N.Y.

Mixed-use urban projects are popping up all over, said Cindy Stewart, ICSC’s director of local government relations. “You still see lifestyle and power centers, but retailers going after that urban market are going into projects that also have housing, because there’s such a strong need for both.”

Why It Works While building in neighborhoods requires rethinking architecture, footprint size, and loading dock placements and adding masked parking decks, Mr. McMahon said it can be worth it: Urban stores often out-perform their suburban counterparts. Increasingly, retailers are recognizing what he calls the place-making dividend: “People will stay longer and spend more money in places that actually earn their affection. Strip shopping centers are retail for the last century, and mixed use is the retail environment for this century.”

Ms. Stewart cited two reasons why big boxes are reshaping themselves into downtown-ready formats.

“The suburbs are saturated,” she said, “and developers and retailers are looking for new markets, and those really are old markets that may be undergoing a rebirth. And when you go out to the green space there are a lot of growth management laws in place that make those projects more difficult to do.”

She added that the fastest-growing sectors of her retail association’s membership are local governments and community organizations working on commercial restoration. Some larger cities and older suburbs are redeveloping strip corridors not just as a place to shop, but as a place to be: Mixed use, walkable neighborhoods with a Main Street feel — precisely what Acme’s master plan calls for.

Residents of Michigan’s inner cities, inner-ring suburbs, and exurbs could learn from recent community-retailer collaborations on new, successful store designs.

Rebounding in Washington One such partnership is in Washington, D.C., where the mayor and a local business partnership established the Washington, DC Marketing Center to lure skeptical retailers into the city’s rebounding neighborhoods.

“We compiled all the retail opportunities into a single resource,” said Michael Stevens, the center’s CEO, “and posted them on our Web site. We know the demographics and traffic counts.”

Extensive research revealed that the neighborhood has a tremendous amount of buying power, thousands more households than the Census counted, and far more disposable income than anyone imagined. Yet the area was annually sending about $424 million, two third of it buying power, to stores elsewhere. So the city assembled a deal to build Tivoli Square, a project with a Giant Foods store — an urban rarity at 53,000 square feet — a restored Tivoli Theater, 25,000 sq. ft. of shops, and 28,000 sq. ft. of upstairs office space.

Tivoli Square has triggered the largest retail project in the District, called D.C. USA, which will mix regional and national retailers with restaurants and a health club.

Oakland’s Transit Village An Oakland, Calif., project is repairing the damage done to the Fruitvale district by years of sprawling suburban development.

“Fruitvale had become a very unattractive neighborhood and it was just filthy dirty,” said Arabella Martinez, the former head of the district’s Spanish-speaking Unity Council, a non-profit promoting Latino opportunity throughout the Bay Area.

The boulevard was dilapidated; the nearby BART rail station, surrounded by acres of parking, was unconnected to the commercial district. The council rallied the community to develop, on its own, a “transit village” in BART’s parking lot. The group reasoned that shops and restaurants serving both the neighborhood and commuters would link the commercial district to the station and provide a community gathering spot. It added housing and planned offices to bring more jobs. Today, with construction almost complete, the area is transformed.

“You see tremendous numbers of people shopping, and you don’t see all the security bars on the storefronts,” Ms. Martinez said. “The district went from a vacancy rate of about 40 percent in 1990 to 1 percent now. All evidence is that the strategy to focus on the retail worked. I’m living my dream.”

New Life for St. Louis Park While the Oakland and Washington projects point the way for possible projects in Detroit or Grand Rapids, a successful effort in Minnesota could guide places like Troy, or even tiny Acme. Both lack a downtown and face threats from ongoing sprawl.

By the early 1990s, St. Louis Park’s main commercial strip had declined to a collection of pawnshops, check-cashing storefronts, and struggling retailers. Officials decided it was high time for a downtown.

“People really wanted to have a place in their community where they could go and just hang out, a real town center,” said Richard McLaughlin, the architect and town planner who conducted public workshops that planned a shopping district and housing surrounding a town green. The city hired TOLD Development Company, which, paying close attention to the retail atmosphere, broke ground in 2001 on 100,000 square feet of retail space and 660 housing units. The firm’s principal, Bob Cunningham, said the plan paid off.

“What’s really attracting people to live there is the mix of retail, because that enhances their lives,” Mr. Cunningham said, adding that residential occupancy rates have never dropped below about 94 percent.

The mix includes a daycare center, Pier One Imports, restaurants, Panera Bread, Starbucks Corporation, and locally owned boutiques, as well as a farmers market and public events that transformed the 600-foot long town green, connected to 30-acre Wolfe Park, into a town focal point.

The town helped the project by building smaller, shared-use parking structures, and revising its tax code to capitalize on rising property values to finance the city’s investments in the town green and streetscapes. Mr. Cunningham said that financing was the trickiest part: “Lenders are still either apartment, condo, or retail lenders. Most don’t do mixed use. But this is a product type whose time has come.”

David Goldberg, a regular contributor to the Michigan Land Use Institute's Elm Street Writer's Group, is the communications director at Smart Growth America. Reach him at [email protected].

National Center for Policy Analysis

BRIEF ANALYSIS No. 501 For immediate release: Monday February 21, 2005

home improvement stores on Iowa counties, Stone Thinking Outside concluded: The “Big Box” ■ Counties with Menards stores averaged about $21 by Pamela Villarreal million more in sales six years after the store opened compared to adjacent counties. Neighborhoods, city councils and the media are debating whether to welcome or discourage big-box ■ Adjacent counties lost about $5 million in sales, on retailers. While Wal-Mart comes to mind, big-box the average, indicating that consumers were crossing retailers are defined as any free-standing store greater county lines to shop at Menards. than 50,000 square feet, and most big-box stores now Stone also found the effect of Wal-Mart supercenters range in size from 90,000 to in Mississippi was similar. 200,000 square feet. Crit- FIGURE I Furthermore, he discovered ics claim that large retailers that some stores not in direct crowd out mom-and-pop New Jobs in Wal-Mart Counties competition with Wal-Mart, competitors and replace them (net permanent gain in retail jobs) such as high-end furniture with windowless warehouses stores, experienced greater filled with minimum wage sales due to the increase in workers. Big-box retailers 55 shoppers attracted to the promise economic benefits 50 nearby Wal-Mart. such as sales tax revenues, Big-Box Benefit: More jobs, competitive wages Jobs. Critics assume that and low prices. But do they the greater competitive edge deliver? Empirical evidence of big-box retailers comes shows that they have pro- from their ability to hire vided numerous benefits. fewer workers and pay them The Development of less. However, empirical Big-Box Stores. Over the evidence has not found this past 50 years, increasing to be true. mobility has made it possible Sources: Michael J. Hicks, et al., “The Regional Impact of ■ Marshall University pro- for people to shop greater Wal-Mart Entrance: A Panel Study of the Retail fessor Michael Hicks found distances from where they Trade Sector in West Virginia,” The Review of that West Virginia counties live or work. The increased Regional Studies, Vol. 31, No. 3, 2001, and Emek with Wal-Mart stores ex- competition for customers Basker, “Job Creation or Destruction? Labor-Market perienced a permanent net necessitated larger stores. Effects of Wal-Mart Expansion,” Review of Econom- gain of about 55 retail jobs, David Boyd of Denison Uni- ics and Statistics, February 2005. on the average. versity argues that changing ■ A University of Mis- regulations also facilitated the spread of large retailers. souri study of 1,749 counties nationwide showed Until the federal Consumer Goods Pricing Act of 1975, that Wal-Mart counties experienced a permanent net manufacturers could establish minimum prices at which gain of 50 retail jobs. (See Figure I.) their products must be sold by retailers. Such resale ■ Bates College researchers Brian Ketchum and James price maintenance severely limited price competition. Hughes showed that Wal-Mart host counties in Maine The current law, however, allows mass merchandisers experienced a net gain in weekly retail wages of $8.24 to provide manufacturers’ products at a lower price. relative to non-Wal-Mart counties. While this is not Big-Box Benefit: Increased Local Sales. Kenneth statistically significant, it confirms that Wal-Mart did Stone of Iowa State University found that retail sales not lower retail wages. dollars from adjacent counties are lost to counties with The West Virginia study also revealed that Wal-Mart big-box stores. In a study on the impact of Menards host counties experienced an average net increase of

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five new retail firms. Researchers refer to this as the the University of Texas at Dallas recently found the “travel substitution effect”: shoppers who previously presence of a supercenter was associated with a 1.36 drove to larger urban areas now have the incentive to point decline in the Consumer Price Index (CPI) for shop in their own town, prompting new firms to cluster groceries, even when controlling for local differences around big boxes. in the cost-of-living. Big-Box Benefit: Increased Productivity. Nation- Moreover, a recent study from the National Bureau wide, big-box retailers have increased labor productivity, of Economic Research reveals the CPI does not com- as measured by retail sales per pletely reflect price changes employee: when big-box stores such FIGURE II ■ Between 1990 and 1999, as Wal-Mart replace other much of the productivity Retail Labor Productivity stores. In other words, if growth in general merchan- Growth, 1990-1999 a new Wal-Mart replaces a dise stores was attributed to competitor, the Bureau of larger stores and greater use Labor Statistics survey is not of “point of sale” technol- adjusted to reflect the lower ogy, such as scanners. (See prices of the new store. This Figure II.) phenomenon is known as ■ From 1995 to 1999, labor “consumer substitution bias” productivity grew 2.3 per- in the CPI. It results in an cent annually, compared overstatement of the grocery to only 1 percent annually inflation rate by about 15 between 1987 and 1995. percent annually. ■ One quarter of the 1.3 per- The evidence that big-box centage point increase in retailers bring lower prices is productivity came from the not surprising. The cost of retail sector, and one-sixth Source: “Labor Productivity in the Retail Trade Industry, re-stocking goods is lower in of this was mainly due to 1987-99,” Monthly Labor Review, December 2001. large stores that use advanced Wal-Mart. * “General merchandise” category including department technology, such as optical Since Wal-Mart began the stores, discount department stores, superstores and hyper- scanners, in their distribution push toward efficient distribu- marts, and dollar stores. systems. They pass these cost tion, other stores have copied savings on to consumers. its practices. Big-box retailers have an efficiency ad- Conclusion. Undoubtedly, as retail evolves and vantage: larger stores can house a greater selection of reduces market inefficiencies, small retailers will be goods, encouraging more purchases by consumers and affected. But evolving industries are nothing new; more sales per square foot, which enables them to reap transportation, health care and other industries look far economies of scale. different than they did even a few decades ago. The Big-Box Benefit: Lower Prices. Although big-box efficiencies and market benefits brought by big box stores create a highly competitive environment that can retailers should not be ignored in community debate. crowd out smaller stores, they also reduce prices. Ana- lyzing 102 urban, suburban and rural areas nationwide Pamela Villarreal is a research associate with the (with and without Wal-Mart supercenters), a study from National Center for Policy Analysis.

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Creating Communities of Place Office of December 95 State Planning Me Department of the Treasury mo Vol. Governor Treasurer I, No. 2 Christine Todd Whitman Brian W. Clymer

BIG BOX RETAIL

Big box retail is currently the in the State in the last five years. If most dynamic sector of the retail Kmart and the other chains are fac- OSPlanning Memo is a monthly industry.While many forms of tradi- tored in, the total growth in super- publication which highlights strate- gies, techniques and data of interest to tional retail have languished in the last store retail space may have been clos- the planning community in New five years, big box retail has achieved er to twice that amount. Jersey. I welcome your comments on significant gains in the marketplace. This trend continues around these memos and your suggestions for The term “big box” refers to the state, with numerous superstores future topics. large industrial-style buildings with under construction or in various vast floorplates or footprints, up to stages of the development review Herb Simmens, Director 200,000 square feet. Although single- process. In addition, Target Office of State Planning story, they often have a three-story Department Stores, the discount 609.292.3155 mass that stands more than 30 feet branch of Dayton Hudson, one of the [email protected] tall, allowing the vertical stacking of nation’s largest retailers, has merchandise. Big box buildings in the announced a planned expansion into range of 120,000 to 140,000 square the Northeast. feet occupy the equivalent of two to Big box retail presents chal- What is Value Retail? three city blocks, or 2 1/2 to 3 1/2 lenges and creates opportunities for There are two key trends in football fields. municipalities. Municipalities and the American retail industry of the Big Box growth in New regions should consider whether it is 1990s: consolidation, expressed by the Jersey in the last five years has been appropriate, where it is most appropri- sustained growth of national chains; significant. As of the end of 1995, ate, what impacts to anticipate, and and a greater focus on providing Home Depot operated 16 stores in how best to mitigate the negative “value” to the consumer.The rise of the state, Wal-Mart operated 13, Sam’s impacts. the big box is linked to both trends. Warehouse Club had six and Kmart To be prepared, it is impor- Value retail reflects a new had 46. tant for municipalities to understand level of price consciousness on the Kmart has long had a pres- the various formats. Because big box part of both consumers and retailers. ence in New Jersey, mostly with older retail is a fairly recent phenomenon, It is a broad label covering several stores in the range of 50,000 to many municipal master plans and zon- retail concepts, such as discount 60,000 square feet. The other three ing ordinances do not adequately department stores, "category killers" national chains have only been active address it. Recognizing this, the Office and warehouse clubs. It can be found here in the last five years. of State Planning has prepared this in urban, suburban and exurban con- The openings of the Wal- Memorandum to assist municipalities ditions, either in stand-alone build- Mart, Sam’s and Home Depot stores that are either considering big box ings, or in various types of planned represent the addition of 3.5 million retail or facing applications for this shopping clusters, such as "power to 4 million square feet of retail space type of development. centers" and "value malls".

OSPlanning Memo Value retail operators share ● large advertising and promotional ● no-frills sale floors and building the following general characteristics: budgets. facilities; and ● reduced staffing and labor costs. ● an emphasis on providing Lower prices to the con- Studies indicate that today’s "value" to the consumer, i.e. sumer are achieved through cost- consumers have less interest in quality name brands at discount cutting strategies such as: shopping, make fewer trips to shop, (considerably less than depart- and buy more on each trip than in ment store) prices; ● large-volume purchasing, often the past. Consumers consider saving ● a preference for a superstore directly from the manufacturer, time a priority, and they prefer (big box) format; minimizing distribution and stores offering “everyday low prices” ● high-volume turnover, with warehousing costs; to occasional department store pro- lower profit margins than con- ● high-tech purchasing and inven- motions or bargain-hunting from ventional retailers; and tory control systems; store to store.

What Are The Major Value Retail Formats? There are four major value retail formats: discount department stores, warehouse clubs, category killers and outlet stores.

Discount Department Stores lion-plus in sales in 1994, and more large-volume turnover, as well as a Discount department stores than 300,000 employees at more strong membership base. Most offer a wide variety of products -- than 2,200 stores. charge members an annual fee. up to 60,000 items -- ranging from Although the three indus- Sam's Warehouse Club, a groceries to apparel to auto prod- try leaders have built retail empires division of Wal-Mart, is the industry ucts to electronics to garden sup- operating stores in the range of leader. Other major players include plies, all at discount prices.This 60,000 square feet, the recent Pace and Price Costco. It is estimat- group includes some of the largest trend has been to consolidate small- ed that more than 1,100 warehouse retailers in the world, such as Wal- er market areas and concentrate on club stores will be in operation Mart and Kmart. a new generation of superstores in nationwide by 1996. Wal-Mart had $82 billion- the range of 130,000 to 200,000 plus in sales in 1994, and sales vol- square feet. These Wal-Mart "super- Category Killers ume has been growing by 20 per- centers" and Kmart "Super K" stores Category killers offer in- cent a year. It has more than are often accompanied by the clo- depth selection in a special retail 500,000 employees at more than sure of older, smaller stores. The category. Examples include Toys "R" 2,000 stores. Kmart had $34 bil- unrelenting competition from the Us (children’s products), Borders industry leaders has contributed to (books and music), Circuit City BIG BOX FACT the financial troubles of smaller (electronics) and Home Depot chains, such as Caldor and Bradlees. (home improvement). Big Box growth in New Category killers, which also Jersey in the last five years has Warehouse Clubs include some of the nation’s largest been significant. As of the end of Warehouse clubs sell a wide retailers, know their market seg- 1995, Home Depot operated 16 range of goods, in bulk, in many dif- ments very well and trade large vol- stores in the state, Wal-Mart ferent product categories but offer umes of merchandise. This allows operated 13, Sam’s Warehouse little selection, with under 5,000 them to establish direct relationships Club had six and Kmart had 46. items stocked. Selling at near-whole- with manufacturers and to cut costs Kmart has long had a sale prices, with limited staff and by eliminating wholesalers. Store presence in New Jersey. The other advertising and very low profit mar- sizes for category killers range from three national chains have only gins, warehouse clubs compete 20,000 square feet to the 120,000 been active here in the last five directly against conventional super- square feet of the average Home years. markets and other discount stores. Depot. Warehouse clubs operate on

2 BIG BOX RETAIL

Reprinted with special permission of King Features Syndicate

Outlet Stores items or a previous season's line at apparel and often a variety of other Outlet stores are the dis- steep discounts. Outlet stores are products at considerable discounts. count branches of national depart- frequently clustered in power cen- They appeal to the traditional depart- ment stores, such as Nordstrom’s ters or value malls. ment-store shopper with a value ori- (Nordstrom Rack) and Macy's entation, and are frequently found in (MCO), or of national manufactur- Other Discount Retailers power centers or value malls, as well ers (Anne Klein, Bass Shoes, North Merchandisers like Marshall's, as conventional shopping centers. Face, etc). They sell overstocked TJ Maxx and Filene's Basement sell

Types of Planned Value Retail Developments Once ostracized by shopping centers, discount retailers are currently perceived as very desirable tenants. Power centers and value malls are the two types of discount retail agglomerations that have emerged as particularly significant. Value retailers are also appearing in conventional regional malls, on equal footing with traditional department store anchors, or even as anchors in smaller, community shopping cen- ters. Many discount retailers also continue to develop or lease free-standing buildings that are not part of a larger commercial development.

Value Malls ous value-oriented retail types, such specialty retailers. Examples include Value malls combine in a as factory outlets, department store Franklin Mills in suburban single, integrated development vari- outlets, category killers and large Philadelphia, Potomac Mills in subur-

3 OSPlanning Memo ban Washington, D.C., and the Power Centers of smaller, in-line stores. They can MetroMall under construction in "Power centers" generally range from 250,000 to more than 1 the City of Elizabeth. Value malls bring together the various branches million square feet and have as many approach 1 million square feet and of the big box family -- for example, as a dozen anchors and co-anchors. tend to locate at the edge of metro- a discount department store, a ware- Anchor tenants typically occupy 60 politan areas. house club, and several category to 100 percent of the center. killers, along with a limited number

Differences Between New and Conventional Retail Formats Power centers, discount malls and free-standing development have been expand- ing rapidly at a time when development of more conventional types of retail has stagnat- ed. This can be explained by the following:

● Financing - Most big box firms ● Merchandise Selection - Category forma. The lender generally have good corporate credit rat- killers and other big box retailers requires the tenant to assume ings. Institutional investors and offer great depth in merchandise responsibility for most operating other lenders have been favoring selection, which responds to cur- costs. development projects with big rent consumer demand. box tenants, while turning down ● Management - Under tenant proposals for conventional retail ● Value Orientation - Big box credit leases, many power-center formats. retailers successfully exploit the tenants are responsible for func- economic uncertainties of our tions -- such as maintenance of ● Tenant Demand - Big box retail- times, as reflected by consumers’ outdoor areas, taxes, liability ers have been expanding prodi- enhanced price-consciousness. insurance, and security -- previ- giously, while traditional depart- ously performed by the shopping ment stores have stagnated or ● Convenience - The industry per- center management. In many cut back. ception is that big box retail cases, the property is subdivided offers greater convenience to and there is no common manage- ● Risk - In power centers, anchors shoppers, and this is at a premi- ment. take up 80 percent to 90 percent um, particularly to two-income of the space. Cash flow is more households. ● Tenant Configuration - The tradi- predictable, developer risk is tional configuration with one or reduced and leasing and manage- Value retail centers may differ more anchors, preferably large ment are easier. from a standard regional mall or a department stores (or supermar- conventional shopping center in the kets, in smaller shopping centers), ● Cost - With little or no common following ways: and a multiplicity of small, in-line space, and with outdoor ameni- ● Financing - Many power centers specialty stores has been replaced. ties at a minimum, power centers are financed by institutional Power centers are built on are less expensive to manage and investors through "tenant credit" anchors, and have considerably maintain than conventional or "bonded" leases that rely on fewer in-line tenants -- or some- regional malls. the retailer's corporate creditwor- times none. thiness, not the developer's pro-

Where is Big Box Retail Locating? Big box retail is locating in every type of environment, including urban areas, older suburbs, edge cities, outer suburbs and rural areas. In new suburban and exurban areas, it ? typically occupies new greenfield sites. In downtowns or inner-ring suburban sites, it is occur- ring through the adaptive re-use of existing buildings or through redevelopment or infill.

4 BIG BOX RETAIL Big boxes typically require MetroMall in Elizabeth is expected to BIG BOX FACT 10-to-15-acre sites at a minimum, and spearhead the redevelopment of favor locations along major arterials, derelict industrial land. Big box retail is locating which maximize access and visibility. Given the right market con- in every type of environment, But some retailers, particularly ware- ditions, retailers are locating in urban including urban areas, older sub- house clubs, have located in manufac- areas and adapting their standard for- urbs, edge cities, outer suburbs turing and warehousing districts, mats and floor plans to the more and rural areas. areas not considered prime by con- complex and constrained develop- ventional retail. ment conditions typical of older This has led planners in cities cities. In response to higher land like New York, Philadelphia, and costs and less land, multi-level stores The new store was designed Toronto to view big box retail as a are becoming the norm. to complement the area’s traditional tool to redevelop obsolete industrial There are also examples of architecture and is served by a park- land, provide new employment big boxes in smaller downtowns. In ing lot shared by all downtown users. opportunities, generate tax revenues Carroll, Iowa, population 9,500, Wal- The City facilitated site acquisition and recapture consumer expenditures Mart located in a previously cleared and shared the costs of building the flowing to similar facilities in the sub- site adjacent to the City’s two-block new parking lot and upgrading infra- urbs. In New Jersey, the proposed retail core. structure.

THE PLANNING ISSUES

The first question to be Some may wish to attract date it. Either way, big box retail uses addressed is whether big box retail is this type of retail to boost the fiscal are regulated by local land use con- an appropriate and desirable use in base, provide employment or revital- trols -- the municipal master plan the community.There is no stock ize older industrial or commercial and land development ordinances -- answer -- each municipality must areas. Others may not want any large and the municipal master planning consider its specific conditions and retail, or may not have adequate process is the appropriate forum to constraints. infrastructure capacity to accommo- discuss the issues.

Municipal Master Plan The planning process should start with the municipal master plan. Too often, municipal- ities react to developer proposals instead of being pro-active and taking control.

The master plan establishes able to New Jersey municipalities, or Main Street that might be the framework for distribution of since the Municipal Land Use Law adversely affected? land uses. A municipality should specifically prohibits development ● will the older shopping centers review its land use plan and identify moratoriums (N.J.S.A. 40:55D-90a). lose their tenants and close? those areas where big box retail It is during the planning ● how will retail uses impact on might be appropriate. It is crucial process that municipalities should neighboring municipalities and that the master plan language address the following questions: the larger region? describing each land use district accurately portray the town’s inten- ● how much land is designated The master plan process pro- tion for that area. for retail uses, and is that an vides an opportunity to discuss the Because big box retail is a appropriate amount? broader role of retail in the communi- relatively new phenomenon, many ● does the community want retail ty and region and to devise and municipalities around the nation that will support a predominant- adopt policies that respond to com- have enacted development moratori- ly local population, or does it munity concerns. Communities that ums, while they revise their planning want to serve a larger, regional are concerned about the impacts of documents and adopt appropriate population? big box retail on local merchants and standards. This option is not avail- ● is there a traditional downtown established retail centers are respond- 5 OSPlanning Memo ing footprint, in effect requiring large- adjoining municipalities, particularly BIG BOX FACT format retailers to go multi-story or regarding retail facilities of regional occupy several buildings, respecting significance. Because trade areas for The master plan process the finer “grain” and scale found in retail go well beyond the boundaries provides an opportunity to discuss older downtowns. Or, in the case of of individual municipalities, sound the broader role of retail in the Mequon, Wis., the total amount of retail policies often require inter-juris- community and region and to devise retail in the town core has been dictional agreements. and adopt policies that respond to capped at 500,000 square feet and Many municipalities have community concerns. strict controls are enforced on new come to realize that the concessions retail construction outside the core. required to compete in the ratable Communities in New Jersey are chase make for poor planning. This ing with a variety of planning strate- advised to check the relevant State creates the opportunity to evaluate gies, such as the retail “caps” adopted statutes and case law when consider- development proposals jointly, and to by towns in Massachusetts, ing innovative controls such as these. reach equitable solutions regarding Pennsylvania and Wisconsin. Retail The master plan process also the distribution of costs and benefits. caps typically establish a maximum provides an opportunity for munici- square footage per building or build- palities to discuss retail issues with

Zoning and Land Development Regulations The next step is to revisit the municipal zoning code and land development regula- tions and assess the locations zoned for retail in terms of permitted uses, bulk requirements, development standards, exactions, and so forth, in light of a better understanding of this type of development. Municipalities should be certain that the uses that have been zoned for are indeed the desired uses and that their scale is appropriate. If a use is not appropriate for a particular location or if the scale is excessive, it is far better for this to come out during the planning process, rather than during a contentious application hearing.

Site Layout and Development Standards amenities, and so forth. tract sizes, which will define the Site layout for suburban big Nevertheless, municipalities general character of the retail box retail is similar to the generic in New Jersey and elsewhere can to development. configurations favored by conven- a remarkable extent influence site tional suburban retail. Stand-alone layout, building location and the Lower minimum tract sizes buildings are usually sited parallel to overall configuration of retail devel- encourage small, stand-alone the arterial, with considerable set- opment through the planning and buildings and fragmented devel- backs and front-yard parking. These zoning tools at their disposal. The opment. Higher minimum tract buildings create the same concerns schedule of bulk regulations con- sizes encourage larger, integrat- raised by conventional strip develop- tained in every land development ed developments. A maximum ment, such as disjointed internal cir- ordinance -- which defines develop- tract size places a cap on the culation, multiplicity of curb cuts, ment parameters such as tract size, scale of development. restrictions to cross-access, etc. lot size, lot coverage or floor area Power centers, like shopping ratio (FAR), setbacks, buffer provi- ● Coverage, site disturbance centers, generally follow an "L" or sions, etc. -- is instrumental in deter- and/or FAR, combined with lot "U" configuration, with the parking mining the character of future size, define the intensity and field located between the buildings development. scale of development. A lower and facing the arterial. With more maximum coverage mandates anchors and fewer in-line stores ● Tract and lot size define the less development, while a higher than conventional shopping centers scale of retail development, coverage encourages a more or malls, power centers generally through the subdivision or lot intensive use of a site. Again, have more stand-alone buildings, consolidation process. It is both minimum and maximum resulting in more disjointed site lay- important to stress that munici- coverage and FARs should be outs, less efficient internal circula- pal codes can control both min- controlled. tion systems, fewer pedestrian imum and maximum lot and 6 BIG BOX RETAIL ● Setbacks and buffers are often- shade trees and other landscaping, facilities, thereby eliminating or reduc- overlooked parameters that architectural details and sidewalks. ing the number of curb cuts (drive- define the envelope for building But municipalities should be cau- way access) from major or minor and site improvements. tious in relaxing site standards. If a arterials. Originally conceived as a means retailer is interested in a given mar- This may entail provisions of separating and buffering uses, ket, reasonable improvements are encouraging shared driveway access, these provisions are very effec- not an obstacle. cross-access between parking lots, tive in separating and creating and rear access. Rear-access roads barriers to circulation between For example: can be defined in the municipal mas- adjacent buildings and lots, even ter plan as master plan roads, or when the uses are complemen- ● Even though it is a co-anchor in designated in the official map. tary. Excessive buffers and set- Central Park Plaza in Steamboat Municipal standards for internal cir- backs have significant unintend- Springs, Colo., the Wal-Mart culation, both vehicular and pedes- ed consequences in deterring store blends in with its sur- trian, are also critical. lot-to-lot pedestrian circulation, roundings, given the shopping Site layout should also con- and unnecessarily complicating center’s unified approach to sider future retrofitting options. Most lot-to-lot vehicular circulation. design, landscaping and signage. newer retail buildings will almost cer-

Municipalities are increas- ● Responding to strict design BIG BOX FACT ingly adopting design guidelines to guidelines, a Target store in control the appearance of new retail Rancho Cucamonga, Calif., has Municipalities in New development. Cities like Toronto, pedestrian amenities: prome- Jersey and elsewhere can to a Fort Collins, Colo., and Cambridge, nades, pavilions, benches and remarkable extent influence site Mass., have strict guidelines requir- lighting. The store faces the layout, building location and the ing large-format stores to respect street, and its architecture overall configuration of retail design objectives and neighborhood reflects the local Mission style. development through the plan- character. Design guidelines typically ning and zoning tools at their address site layout issues, such as ● Woodfield Village Green, a disposal. parking lot orientation, building ori- power center in Schaumburg, entation, building entrances, pedes- Ill., has extensive landscaping, trian circulation, public spaces and gazebos, garden seating areas lighting and landscaping; as well as and other pedestrian amenities. tainly reach functional obsolescence architectural issues such as facades well before they reach physical obso- and exterior walls, fenestration and ● The Nassau Park power center lescence. The rapid pace of change in display windows, materials and col- in West Windsor Township New retail formats will continue to vacate ors, roofs, architectural details, Jersey, when fully built, will buildings that remain sound in struc- awnings and canopies, signage, and include extensive landscaping ture and systems. so forth. and pedestrian amenities. Accordingly, today’s site lay- Retailers have also taken out should try to anticipate tomor- interesting initiatives with innovative Vehicular and pedestrian cir- row’s needs. Parking lots may building design -- Wal-Mart’s well culation planning, parking standards become public plazas or open publicized environmental demonstra- and access management plans are spaces; retail buildings may become tion store in Lawrence, Kan., features other critical tools for shaping retail housing, offices or civic uses. And energy conservation measures, such areas. In New Jersey, the Municipal the circulation system should be as skylights, as well as construction Land Use Law (NJSA 40:55D-35) planned to facilitate future connec- materials and building systems requires that municipal zoning be tions -- including pedestrian and designed to minimize the building’s consistent with adopted access man- bicycle links -- to surrounding uses. impact on the environment. agement plans, in order to preserve Since big box retail depends road capacity.This provision is being Parking by definition on undercutting the enforced along State highways, as a There is no consensus on competition, developers faced with result of the State Highway Access the most appropriate parking provi- weak standards may extend this management Code. Municipal codes sions for big box retail. In the “stripped-down” approach to site can require alternative access to retail absence of specific standards for this development, and limit or eliminate type of retail, shopping center stan- 7 OSPlanning Memo dards are generally used. The industry ly in excess of the industry norms. projects in urban areas either pro- norm for shopping center parking is And some big box chains, vide no parking (e.g. in Manhattan) 4 spaces per 1,000 square feet of site conditions permitting, have or are increasingly relying on struc- gross leasable area in shopping cen- implemented parking ratios well tured parking, with ratios no higher ters of up to 400,000 square feet; above industry standards, on the the- than 4 spaces per 1,000 square feet 4.5 spaces per 1,000 square feet in ory that each big box is a destination (e.g. in other New York City bor- centers from 400,000 to 600,000 store, with little or no cross-shop- oughs). square feet; and 5 spaces per 1,000 ping, which leads to longer parking Different formats may have square feet in centers of more than turnover and less potential for park- different parking needs. A recent 600,000 square feet. ing to be shared between tenants. For study in the April 1993 issue of the Communities are free to set example, the Wal-Mart development ITE Journal suggests that warehouse their own standards and it is not application in Raritan Township, clubs generate almost half the traffic known to what extent they adhere to Hunterdon County, proposes 5 -- and parking demand -- of a con- the industry-recommended standards. spaces per 1,000 square feet for a ventional shopping center with the There is evidence that some commu- building of 160,000 square feet. same area. nities require standards that are clear- On the other hand, big box

Impact Studies Municipalities that require impact studies as part of the application process can better assess the consequences of development and make more informed decisions. Various impact studies may be requested -- environmental, fiscal, traffic, market area, etc. The more sophisticated the assessments, the better the information available for local decisions. Impact assessments are also instrumental in determining the appropriate off-site improvements and exactions.

Impact studies are usually increased by an average of $9 million, increased retail sales in host communi- required only for projects exceeding but the town’s existing retail base lost ties by an average of 15 percent, a a minimum threshold. The threshold $11 million. Within the host towns, portion of those sales came at the can be low -- it is 10,000 sq ft in businesses carrying the same mer- expense of existing retailers. An Cape Cod, Mass., and Vancouver, chandise as Wal-Mart lost sales, but assessment of a Wal-Mart proposed B.C. -- or high, perhaps in excess of “complementary” businesses -- those for Greenfield, Mass. reached similar 200,000 sq ft. It should reflect the that provided goods or services not conclusions. community’s level of concern with provided by Wal-Mart -- benefited The assessment estimated that type of development, its eager- from the higher traffic generated by that Greenfield would gain 177 retail ness to attract new ratables, the level Wal-Mart, and increased their sales. jobs within 10 years and between of “overstoring”, etc.. Small towns (population 500 $51,000 and $100,000 in annual to 5,000) within a 20-mile radius suf- property taxes. However, Wal-Mart Economic Impacts fered a net sales loss of almost 20 could displace 25 percent of the city’s It is often feared that large- percent in the five-year period after retail base of 365,000 square feet. format value retailers will capture a the Wal-Mart’s opening. Other small A 1989 study conducted for portion of the existing market base towns farther away but still within the Wal-Mart by the University of at the expense of existing retailers. trade area suffered sales reductions of Missouri presented a dissenting view. Published studies suggest that this is 10 percent. Stone points out that in It found that payrolls, gross sales, tax often the case, but there may be sig- dynamic, growing markets, there is revenues and the number of retailers nificant variations, depending on local much greater potential to assimilate were all positively affected in the 14 markets. large discount retailers without seri- Missouri counties where Wal-Mart Early studies of Wal-Mart ous dislocation of existing merchants. opened stores between 1983 and 1987. stores in 30 Iowa towns during a five- Other studies, including a Impact studies in more com- year period showed that for every 1989 impact assessment of 10 Wal- plex, metropolitan markets, on the $20 million in annual Wal-Mart sales, Mart stores in Colorado, confirmed other hand, suggest that fears of eco- the host town’s total sales volume that, although new superstores nomic dislocation caused by super-

8 BIG BOX RETAIL stores may be misplaced or exaggerat- ends for a 100,000-square-foot police, fire, courts, road maintenance ed. New York City studies of new facility). It is important to remember and traffic control. In addition, the large-format supermarkets indicate that not all trips will be new. A rule availability of retail services often that, although smaller, independent of thumb is that 70 percent of trips stimulates residential development supermarkets and other existing food- will be destination trips, while 30 nearby, requiring additional public stores lose market share, there is little percent will be pass-by trips drawn services. impact on gross sales. Prices are lower from the existing traffic stream. The tax revenues generated at the new large-format supermarkets, It is also accepted, but often by new retail ratables may be partial- and they offer much greater variety overlooked, that big box retail gen- ly or substantially offset by formula- and depth of products. But smaller erates far more truck traffic than based increases in county taxes and stores are faster and more convenient, conventional retail. This is due to regional school taxes resulting from and frequent, large-volume shopping is higher sales volumes and merchan- the relatively greater tax capacity of not feasible for urban populations dise turnover. the municipality. State aid for with low auto-ownership rates. Shopping centers generate schools or municipal services may Most of this discussion has approximately 1.35 daily truck trips also decrease for similar reasons. The focused on the impacts of new store per 10,000 square feet of floor area. net effect of increased direct service openings on the existing retail base. Different retail uses, however, have requirements, induced residential However, market-dominant big box dramatically different delivery demand, higher tax payments for retailers are closing smaller, older requirements. regional services and possible loss of stores and consolidating market areas According to a recent state aid requires careful analysis. around new superstore facilities. study where a conventional depart- Nowata, Okla., and Hearne, Texas, are ment store generates one tractor- BIG BOX FACT two such cases. trailer a day, a home improvement Based on the available stud- store generates 35 tractor-trailers According to a recent ies, it is unclear how impacts may and six small trucks/vans. A super- study, whereas a conventional differ between complex urban mar- market generates two tractor-trailers department store generates one kets and simpler rural markets, or and 20 small trucks/vans a day. tractor-trailer a day, a home between dynamic, growing markets Site planning for efficient improvement store generates 35 and stagnant markets. It is also not goods delivery therefore takes on tractor-trailers and six small well understood whether store size added importance. Municipalities trucks/vans. A supermarket gen- plays a role; that is, whether small may want to consider regulating erates two tractor-trailers and 20 stores are affected differently from delivery schedules similarly to Fort small trucks/vans a day. medium-size stores. Collins, Colo, which prohibits deliv- eries between 7 p.m. and 7 a.m. Traffic Impacts Traffic impacts are often the Fiscal Impacts The most appropriate time most contentious aspects of any Many communities view the for this analysis to be conducted is application for commercial develop- capture of non-residential ratables as during the preparation or re-exami- ment. In the absence of specific trip- an important means of stabilizing or nation of the master plan, when a generation standards for big boxes, even reducing local property tax variety of alternative proposed land impact studies rely on traditional rates. While this may be true for use patterns can be examined. Fiscal, retail standards, including shopping some communities for short periods economic, environmental, traffic center standards. of time, the tax implications of non- and social impacts should be care- With the possible exception residential ratables, particularly retail, fully projected and the interrelation- of warehouse clubs, it is generally are often considerably more com- ships between these impacts accepted that the number of cos- plex than anticipated. weighed. Unfortunately, fiscal tumer trips generated by big box New retail development impacts all too often are considered retail is comparable to conventional does not directly generate school- only at the project review stage. retail with the same square footage age children, but it does require (about 7,400 average weekday trip outlays for public services such as

9 OSPlanning Memo Development Exactions Development exactions should be part of the local code and preferably defined in advance, through transportation improvement districts (TIDs) or other accepted mecha- nisms for pro-rating costs to individual developments. Municipalities should be careful to base exactions on accepted methodologies; to establish a “reasonable relationship” between development proposal and development exaction; and, preferably, to link specific exactions to the results of credible impact studies. Exactions that are unrelated or poorly linked to a proposed project are likely to raise objections and may not withstand legal challenge.

There are many examples of ee traffic. The site is in the municipal support for the downtown. And the big box-related development exac- TID. Exactions based on area-wide package offered by Wal-Mart in tions. Nassau Park -- a development TIDs have been upheld by New Greenfield, Mass., included funds for with 1 million square feet of office Jersey courts. downtown streetscape improvements; space and a 600,000-square-foot Municipalities around the funding for an archaeological dig on power center anchored by Wal- nation have not limited exactions to the development site and a mobile Mart, Home Depot and Sam’s -- infrastructure applications. Some exhibit of the findings for local contributed $1.8 million to West towns, like Colliersville,Tenn., charge schools; and the contribution of a 75- Windsor Township for transporta- impact fees on new commercial devel- acre parcel to extend the municipal tion and sewer improvements, and opment outside the downtown to industrial park. Again, New Jersey $2.2 million to Mercer County for fund downtown improvements. municipalities considering innovative transportation improvements. Auburn, Wash., required a suburban exactions should check the relevant The developer is also mall developer to provide shuttle bus State statutes and case law. required to submit an annual survey service to and from the downtown, in of peak trip generation and employ- addition to financial and marketing

Citizen Activism Big box retail development proposals have inspired considerable resistance from coalitions of “Main Street” merchants, environmental organizations, neighborhood groups, historic preservation interests and others, both in New Jersey and around the country. (New Jersey case law involving a development dispute is found in Manalapan Realty vs Township Committee of Manalapan Township, a case where the municipality, responding to neighborhood concerns, effectively precluded a Home Depot from locating in an expanded regional mall.)

Wal-Mart, as the leading The state of Vermont has information on strategies that have and fastest-growing retailer, has been working with Wal-Mart execu- worked. The National Trust for been repeatedly targeted by these tives to explain the statewide Historic Preservation has taken a groups, and has come to represent growth management rationale and leading role in the field. There is a the entire industry. Perhaps the to suggest suitable locations close growing number of consultants who most widely publicized cases have to existing downtowns. Wal-Mart advise Main Street and other local been in Vermont, where proposals to has finally received approval to open merchants on how to reposition build retail outside the state’s tradi- a store in an old Woolworth build- their businesses when facing the tional centers have been repeatedly ing near downtown Bennington. eminent opening of Wal-Mart or blocked under Act 250, a growth- Resistance to big box pro- other discount department stores; management framework that posals has spawned a small growth some publications also address these requires state review and permitting industry, with a national network issues directly. of projects of regional significance. dedicated to the dissemination of

10 BIG BOX RETAIL

Big Box Retail Within the Framework of New Jersey’s State Plan Although big box retail is not explicitly discussed in the New Jersey State Tomorrow's Development and Redevelopment Plan, which is a broad policy document, it contains NEW JERSEY principles that are important in framing the issues raised by any type of large-format development.

At the core of the State make sure any large-format retail mising fundamental principles of Plan is an appeal for municipalities facilities are within the Community accessibility to pedestrians and mass to embrace better planning. This Development Boundary. transit, and without destroying often involves looking beyond The State Plan encourages neighborhood character. Although municipal boundaries and reaching mixed-use development in compact big boxes raise design challenges, interjurisdictional agreements. forms, with retail and services within the Office believes it is necessary Because large-scale retail walking distance of housing and for planners, developers, retailers, draws on large trade areas, the other uses. Big box formats with Office of State Planning encourages their large building floorplates and BIG BOX FACT municipalities to consider jointly the surface parking requirements seem- broader role of retail, through their ingly challenge this model. However, Because large-scale master planning processes, and to the experience with both “in-town” retail draws on large trade evaluate jointly projects of regional regional shopping malls and with areas, the Office of State significance. Municipalities partici- urban big box development sug- Planning encourages municipal- pating in the State planning process gests that the traditional fabric of ities to consider jointly the can request assistance from the streets and blocks that inspired the broader role of retail, through Office in planning, project evalua- State Plan concept of centers is very their master planning process- tion, or interjurisdictional agree- flexible, and that large-format uses es, and to evaluate jointly pro- ments. Also, assistance is often avail- can be accommodated in these set- jects of regional significance. able from county planning boards. tings, with appropriate design guide- The Office encourages lines. municipalities to refer to the State Historically, this has been Plan’s Resource Planning and the case. Large industrial and ware- local officials and community resi- Management Structure and to direct house buildings, which the big dents to find innovative ways to large-format development to the boxes emulate, as well as other land- accommodate these uses without appropriate center types in accor- intensive uses, such as transporta- compromising fundamental growth- dance with the policy objectives of tion terminals, stockyards, and large management and quality-of-life- the relevant Planning Area. educational and health facilities, are objectives. Communities involved with the cen- integrated into the surrounding ters designation process should also physical pattern without compro-

For Further Information

This paper is the first in a proposed series on retail and its planning implications. To obtain a copy of a larger study of big box retail, please contact Sheila Bogda at (609) 292-3744. For fur- ther information on this topic, to consult documents on which this document is based or to find out more about how the Office of State Planning can assist your community in this area, please contact Carlos Macedo Rodrigues, Manager -- Special Projects, at (609) 292-3097.

11

Controlling Big Box Retail Development in Georgia

Land Use Clinic

University of Georgia School of Law and College of Environment & Design

December 2004, Updated February 2007

TABLE OF CONTENTS

I. Introduction – The Rise of “Big Box” Development...... 3

A. Background: The Rise of Sprawl...... 3

B. What is Big Box Development?...... 4

II. The Law of Big Box Retail...... 5

A. Underlying Zoning Principles and Law...... 5

B. Case Law On Big Box Development...... 6

III. Controlling Big Box Development in Georgia...... …9

A. The Use of Retail Caps...... …9

B. Peachtree City.……………………………………………………………………….10

C. Fayetteville...... 13

D. City of Roswell...... …14

E. City of College Park………………………………………………………………….15

F. Results of Proposed Big Box Ordinances: Marietta, Forsyth County, and Cherokee

County...... ……………………..17

IV. Local Bans and Statewide Controls – The Case of California...... ……....18

V. Other Examples of Controlling Big Box Development...... 21

A. Moratoria and Design Regulations – Fort Collins, Colorado...... … 21

B. Restrictions on Outdoor Display and Signage...... …23

VI. Conclusion...... 26

2 I. Introduction – The Rise of “Big Box”1 Development

A. Background – The Rise of Sprawl

Since the end of World War II, America has witnessed the ever-increasing phenomenon

of sprawl. Traditional neighborhoods were characterized as “mixed use, pedestrian friendly

communities of varied population, either standing free as villages or grouped into towns and

cities….”2 But as suburbs spread further from the urban core in the years following the end of

World War II, large tracts of land were cleared to build the suburban tract housing that is

characteristic today. Suburban sprawl has become “the standard North American pattern of growth;”3 and is "characterized as 'non-contiguous, automobile-dependent, scattered, new

development on the fringe of settled areas….’”4 In these fringe areas were built large retail

developments, which have evolved into today’s “big box” stores.5

The rise of big box retail is no accident. Following World War II, America experienced a

boom that saw our economy “shift from a central city-based manufacturing economy to a

suburban-based service and information economy.”6 At the same time, the “desire to be free of

central city taxation and zoning… the availability of open land… [as] taxable assets; pressure

from landowners to convert open land to more valuable suburban uses; and broad, judicially

unreviewable and politically unaccountable grants of zoning authority from state legislatures to

1 ”Big Box” development refers to stores that range from 90,000 to 250,000 square feet, which are typically 20 to 50 times the size of typical downtown retailers. Leslie Tucker, Retail Caps for Retail Glut: Smart Growth Tools for Main Street, NATIONAL TRUST FOR HISTORICAL PRESERVATION 1 (2002), available at . 2 ANDRES DUANY, ELIZABETH PLATER-ZYBERK, AND JEFF SPECK, SUBURBAN NATION: THE RISE OF SPRAWL AND THE DECLINE OF THE AMERICAN DREAM 5 (2000). 3 Id. 4 Janice C. Griffith, The Preservation of Community Green Space: Is Georgia Ready to Combat Sprawl with Smart Growth?, 35 WAKE FOREST L. REV. 563, 565 (2000). 5 Jeremy R. Meredith, Sprawl and the New Urbanist Solution, 89 VA. L. REV. 447, 448 (2003). 6 Henry R. Richmond, Sprawl and its Enemies: Why the Enemies are Losing, 34 CONN. L. REV. 539, 548 (2001).

3 municipalities” also contributed to the rise of sprawl.7 The result of this shift was that by 1990,

“of the eighty percent of the American people who lived in metropolitan areas, two-thirds lived

in suburbs—few of which even existed in 1910.”8 This environment helped set the stage for the success of big box retailers by providing new markets in outlying suburbs and the consumers needed to support the increasingly large retail stores.

B. What is Big Box Development?

Big box stores are built as part of power centers9 or as freestanding stores and have

grown increasingly larger in recent years. Today, big box retailers are said to account for over

half of all new retail space built in America.10 Underscoring the size and impact of these stores,

Fortune recently reported that “Wal-Mart… [opens] almost 300 new stores a year… A

Supercenter can be a $100 million-a-year business with up to 600 employees.”11 While big box

stores boast convenient, one-stop shopping, they are criticized for their hidden costs.12 These

include:

[T]raffic congestion; loss of trees, open space and farmland; displaced locally-owned small businesses; substitution of jobs that support families with low-paying jobs that don’t; air and water pollution; dying downtowns with vacant buildings; abandoned shopping centers and the creation of more retail space than the local economy can support; a degraded sense of community; placing large burdens on public infrastructure, such as sewers

7 Id. at 554. 8 Id. at 551. 9 Also called a super-community center, power centers differ from traditional malls in that they are not enclosed, have few amenities, and are composed of multiple anchor tenants. In addition, a small percentage of a center’s leaseable area is devoted smaller stores on a speculative basis after the center is developed. Raymond G. Truitt, Fe Fi Fo Fum: Retail Giants Rule Power Centers, 10 APR PROB. & PROP. 38, 39 (1996). 10 Tucker, supra note 1. 11 Cora Daniels, Women vs. Wal-Mart, FORTUNE, July 7, 2003, available at . 12 Tucker, supra note 1.

4 and road maintenance; discouraging new business development; and sprawl.13

Big box stores are often built to last for only short periods of time, with many

of them leased from developers who build them on open land at the edge of town,

where development costs are low.14 This lack of investment by the store in the

development project makes it easier for big box retailers to simply walk away when

they find it fitting to do so. Indeed, communities “worry that a big box user may abandon a store as corporate restructuring and market analysis determine that a once desirable site has become less profitable.”15 A further problem is presented when the former retailer continues to lease the abandoned space to prevent a competitor from moving in, effectively prohibiting the center’s redevelopment.16

II. The Law of Big Box Development

A. Underlying Zoning Principles and Law

Georgia’s constitution provides that “[t]he governing authority of each county and of

each municipality may adopt plans and may exercise the power of zoning.”17 While this does

not prohibit the General Assembly from enacting general laws establishing procedures for the

exercise of such power, this grant of power leaves the substance of planning and zoning laws up

to the local municipality or county governing authority.18 Thus the power to regulate the

development of big box retail stores falls to the municipalities. The basic legal issue involved in limiting the size of big box superstores is whether the exclusion advances a legitimate zoning

13 Constance E. Beaumont & Leslie Tucker, Big-Box Sprawl; (And How to Control It), MUNICIPAL LAWYER, 7 (Mar./Apr. 2002). 14 Fold Big-box Stores Before It’s Too Late, ATLANTA JOURNAL-CONSTITUTION, Oct. 17, 2000, at A18. 15 Truitt, supra note 9, at 39. 16 Fold Big-box Stores before It’s Too Late at A18. 17 GA. CONST., art. IX, § II, Para. IV (1983). 18 Id.

5 purpose, with the court normally ruling in favor of the city if it has a reasonable planning based

rationale for its action.19 In Georgia, the burden is on the property owner challenging a zoning ordinance to establish by clear and convincing evidence that the owner “will suffer a significant detriment” under the ordinance and that the zoning “bears an insubstantial relationship to the public interest.”20

B. Case Law on Big Box Development

The law on the use of retail caps to limit the size of big box retail stores in Georgia

appears to be nonexistent, reflecting the relatively recent nature of use of caps in this state.

However, there is a small body of case law from other jurisdictions where retail facilities

exceeding certain square footage requirements are prohibited from certain zoning districts. For

example, the validity and constitutionality of a law that set caps on the size of big box retail

stores was discussed in Great Atlantic & Pacific Tea Co. v. Town of East Hampton.21 After adopting a six-month moratorium on site plan approvals for retail stores exceeding a gross floor area of over 20,000 square feet, the city passed the Superstore Law, restricting the establishment of superstores and supermarkets except within the Central Business zoning district.22 Prior to the

passage of the law, A & P had applied for a site plan approval for a supermarket that would have

been placed outside of the Central Business zoning district in a Neighborhood Business zoning

district. Due to its expected size, 33,878 square foot area with a 15,000 square floor cellar,23 the

proposed supermarket was denied approval based on the passage of the Superstore Law.

19 Tucker, supra note 1. 20 Henry County v. Tim Jones Properties, Inc., 273 Ga. 190 (2000). 21 997 F.Supp. 340 (1998). 22 The Superstore Law defines a 'superstore' "as a retail store located within a building whose gross floor area equals or exceeds 10,000 square feet," and defines a 'supermarket' "as a superstore in which food and/or beverages constitute the predominate goods for sale." Id. at 345.

23 Id.

6 In arguing against the Superstore Law, A & P argued “that the size restrictions imposed

by the Superstore Law were wholly arbitrary, not in the furtherance of any legitimate

governmental purpose, do not bear a reasonable relationship either to the ends sought to be

achieved by the law or to the public, health, safety, morals, or welfare."24 Ultimately the

constitutionality of the ordinance was not addressed by the court because the appeal was based

on a motion to dismiss, which did not provide sufficient facts for such a determination.25

In Home Depot U.S.A. v. Portland, the city amended its zoning ordinance to make "retail

facilities... [in excess of 60,000 square feet] non-permitted in certain 'industrial districts' where

they previously had been conditionally permissible... [and] also made the uses only conditionally

permissible in certain 'employment districts' where they previously were permitted outright."26

The city based the law's purpose on the need to "'protect Portland's industrial sanctuaries, areas that generate a high percentage of family-wage jobs, from large scale retail and office uses and their negative impacts on traffic and land value.'"27

Home Depot argued that the amendments were either inconsistent with or not supported

by findings to be consistent with a statewide planning goal that required local urban area plans

“to provide ‘for at least an adequate supply of sites of suitable size types, locations, and service levels for a variety of industrial and commercial uses[.]’”28 The court rejected this argument,

however, finding that the goal “requires planning and provision for a ‘a variety of industrial and

commercial uses,’ not a Herculean—or quixotic—planning and zoning effort whereby every

community assures that there are available sites for every conceivable kind of business

24 Id. at 345. 25 Id. at 348. 26 169 Or.App. 599, 601 (2000). 27 Id. at 601. 28 Id.

7 activity.”29 Instead of depleting the land supply for commercial and industrial uses, the court

found that the amendments only changed “the conditions under which a particular kind of

business activity may be approved within areas that remain zoned as business districts and

remain available for business uses of various kinds.”30 Indeed, the court concluded its decision

noting that, “When it is all said and done, petitioner’s challenges to the city’s finding and to the

substance of its decision reflect a disagreement at the policy and planning level… This court of

course is not the appropriate forum to resolve” these issues.31 While such a case does not seem

to have been brought in Georgia, relying on a policy based justification could be an important

defense if retail caps are challenged.

Big box control ordinances are also challenged as effecting a taking. Such was the case

in Loreto Development Co. v. Village of Chardon, where the court considered the denial of a

conditional use permit for a proposed ninety-eight-thousand-square-foot Wal-Mart store in a zone where retail establishments were limited to “local retail businesses” of 10,000 square feet or

less.32 While the trial court ruled the ordinance unconstitutional, the Court of Appeals noted that the appellee “failed to establish, beyond a fair debate, that the zoning restrictions deprived it of the use of its property.”33 The court noted that there was evidence that the owners could develop

the site as zoned and had been offered more for a portion of the property than it had originally paid for it.34

The city's justification for the ordinance was crucial to this outcome. In answering

whether the zoning ordinance advanced a legitimate governmental interest, the court found that

29 Id. at 602.

30 Id. at 603. 31 Id. at 604. 32 119 Ohio App.3d 524, 527 (1996). 33 Id. at 528. 34 Id.

8 the regulations “[are] intended to prevent traffic congestion, excessive noise, and ‘other

objectionable influences’” and that the preservation of “the residential, small town character of

this part of town…was clearly a legitimate interest to be advanced by this zoning.”35 The

appellee also argued that the floor size restriction “fails to advance the purported interests… because the total area of retail space is the same whether there are nine small stories or one large store, there is no difference in the noise and traffic generated by the larger store.”36 Yet the court

found that even the evidence presented by the appellee supported the position that “such a large

store would cause noise and traffic congestion and would destroy the existing character of the area” because it would draw business from surrounding communities.37 Thus, the appellate court

found the restrictions unconstitutional, since the “appellee failed to present competent, credible

evidence that the local retail business restrictions both deprive it of any economically viable use

of its property and failed to advance a legitimate governmental interest….”38 This indicates that it is possible to uphold big box retail restrictions despite their impact on the use of property interests.

III. Controlling Big Box Development in Georgia

A. The Use of Retail Caps

In recent years, several devices have been used to guard against the blight that results from abandoned big box stores, many of which stand in the shadows of new, larger stores built or leased by their parent companies. Indeed, "[b]ig box retail is another growing commercial use problem. Municipalities may try to deal with it by limiting the size of stores in commercial

35 Id. 36 Id. at 529. 37 Id. 38 Id. at 528-29.

9 districts."39 This is exactly what many communities have done thorough the use of retail caps,

which are limits on a retailer’s sales volume, or limits on the size of big box stores.40 These size limits can apply to either overall square footage or to the so-called “footprint”41 of a store. The

limitations on store footprints often allow large retail stores to be built larger by adding another

story to the structure.42

It is important to note that the retail cap should be based on local planning efforts and

should not simply be copied from another jurisdiction. While many of these caps have been set

under 100,000 square feet, caps range from 30,000 to 80,000 square-feet and more.43

B. Peachtree City

Peachtree City’s big box ordinance represents one of the first attempts by a Georgia

municipality to address the issues associated with big box blight. At the time the ordinance was passed city leaders expressed fears that there could be a string of big box stores built if the issue was not addressed.44 This fear is reflected in the language of the ordinance itself. According to

the ordinance, the intent of creating the general commercial district includes the desire to “avoid

the development of ‘strip’ type business areas.”45

Peachtree City’s ordinance is designed primarily around the use of retail caps as part of an overall big box ordinance that seeks to limit the impact that these stores would have on the city. Under the city’s general commercial district ordinance, retail businesses that sell

39 DANIEL R. MANDELKER, LAND USE LAW §5.36 (5th ed. 2003). 40 Tucker, supra note 1, at 1. 41 Footprint is used to refer to stores that build multiple floors on top of one another, with only the first floor's square footage applying to the size of the store that can be built. Id. 42 Id. 43 Tucker, supra note 1, at 2-4. 44 Sonja Lewis, Peachtree City May Limit New Big-stores Size: Proposal is Designed to Protect Against the Possibility of Unsightly Abandoned Buildings, ATLANTA JOURNAL-CONSTITUTION, Aug. 24, 2000, available at 2000 WL 5472338. 45 PEACHTREE CITY, GA., CODE OF ORDINANCES § 1006.1 (2000) [hereinafter PEACHTREE CITY].

10 merchandise “on an individual zoning lot where an individual tenant occupies more than 10,000

square feet”46 are subject to the ordinance.47 Maximum areas on any zoning lot are set at

150,000 square feet for general retail space and 50,000 square feet for theater and restaurant

space.48 The ordinance’s key requirement is that “[n]o single commercial tenant shall occupy more than 32,000 square feet [of] floor area.”49

Peachtree City officials also designed the ordinance as a tool to help landlords market

their property after retailers leave to occupy newer, larger spaces nearby.50 The surrounding business owners and community are often hurt by the continued leasing of the empty space by the previous big box tenant. Peachtree City’s ordinance requires that empty stores be maintained as if they are occupied, including such activities as cleaning the windows regularly. This discourages blight and may even an incentive for old tenants to give up their lease on the empty property.51

Also, the ordinance requires that leases for big box stores contain a clause forbidding the

tenant from continuing to lease the space after vacating it. Under the law, tenants occupying

more than 10,000 square feet are required to

[P]rovide the city attorney with a copy of the rental agreement between the tenant and its landlord which contains a contract provision prohibiting the tenant from voluntarily vacating such premises or otherwise ceasing to conduct its retail business on such premises while simultaneously preventing the landlord, by continuing to pay rent or otherwise, from leasing the premises to another person or company who will operate a permitted business on the premises.52

46 PEACHTREE CITY, supra note 45, at § 1006.3. 47 Id. at § 1006.3(a). 48 Id. at § 1006.3(a)(1). 49 Id. at § 1006.3(a)(2). The 32,000-sq. ft. restriction in the ordinance was based on the size of big box stores in Peachtree City at the time the ordinance was proposed. Telephone Interview with Jim Williams, former Development Services Director, Peachtree City, Georgia (June 10, 2003). 50 Id. 51 Id. 52 PEACHTREE CITY, supra note 46, at § 1006.3(6).

11 This requirement raises possible Contract Clause issues because of the city's involvement

in the contracting process between lessor and lessee. The U.S. Constitution states: "no state shall

pass any... Law impairing the Obligation of Contracts..."53 Yet "[t]he contact clause is not an

absolute bar to a land use regulation that impairs a contact."54 Accordingly, a court must first

determine that there has been an impairment of a contact, but this impairment can be found valid

if it is justified by a legitimate governmental purpose.55 “Of course, the finding of a significant

and legitimate public purpose is not, by itself, enough to justify the impairment of contractual

obligations. A court must also satisfy itself that the legislature’s ‘adjustment of the rights and

responsibilities of contracting parties [is based] upon reasonable conditions and is of a character

appropriate to the public purpose justifying [the legislation’s] adoption.’”56 It is important to note

that, when addressing requirements upon private party contracts,57 a court should show deference

to the legislative judgment as to the “necessity and reasonableness of a particular measure.”58

Some cases arise where ordinances are claimed to be either cases of restrictive commercial zoning, which could be a violation of the rule that control of competition is not a proper zoning purpose,59 while others claim that it is it an attempt to use "zoning to control

market demand."60 And while "zoning may not be used to control competition... Some courts...

uphold zoning that affects competition if control of competition is not its primary purpose and if

it implements other legitimate zoning objectives."61 Even if a claim of competition interference

were to be raised, the fact that the ordinance is based on the comprehensive plan further insulates

53 U.S. CONST., art. I, § 10, cl. 1. 54 MANDELKER, supra note 40, at §2.52. 55 Id. 56 Keystone Bituminous Coal Assn. v. DeBenedictus, 480 U.S. 470, 505 (1987). 57 As opposed to contracts in which the state is a party. 58 Id. 59 MANDELKER, supra note 40, at § 5.33. 60 Id. at § 5.44. 61 Id.

12 it from being overturned because "commercial zoning may not be invalid as an improper control

of competition if it is based on a comprehensive plan."62

There has been one lawsuit filed against Peachtree City based on this ordinance. The

case primarily turned on whether a Target store had a right, pre-existing the ordinance, to build

on a particular site. The case was settled and so the overall validity of the ordinance was not

litigated. In the settlement Target agreed to reduce the project size by 20 percent and change the location of the store’s entrance to ease neighbor’s concerns over traffic.63 Prior to the settlement,

Target was planning to argue that the ordinance was unconstitutional because it singled out retail

for restriction over other land uses.64

C. Fayetteville

In April 1996, Fayetteville amended its zoning rules to create a category for stores in

excess of 75,000 square feet. The ordinance also requires that [b]ig box stores be built on sites

that have access to two state highways.65 This followed an attempt by Wal-Mart to build a

200,000 square feet store next to a subdivision on Georgia Highway 85, which led the city to

pass a moratorium on new big box stores in order to effect the zoning changes.66 Fayetteville

regulates big box stores as high intensity commercial and requires that commercial centers and

single tenant retail stores over 75,000 square feet be planned unit developments (PUDs) only.67

62 Id. at § 5.47. 63 Kevin Duffy, Peachtree City: Agreement heads off trial over Target, THE ATLANTA JOURNAL CONSTITUTION, Sep. 22, 2005. 64 Kevin Duffy, Accord paves way for Target, THE ATLANTA JOURNAL CONSTITUTION, March 27, 2004. 65 Rick Minter, ‘Big-box’ stores must have access to 2 highways, THE ATLANTA JOURNAL CONSTITUTION, Apr. 18, 1996, M11, available at 1996 WL 8202027. 66 Id. 67 CITY OF FAYETTEVILLE, GA., CODE OF ORDINANCES § 94-168(3) (1997). Under a planned unit development, “the city can incorporate controls into the plan, such as, for example, requiring buffer zones. The PUD plan is then recorded, thereby protecting the city and the public as well as the purchasers in the development.” Mayor and Aldermen of the City of Savannah v. Rauers, 253 Ga. 675, 676 (1985).

13 The C-4 zoning designation for these stores also allows any use permitted in the C-3 zoning

district, including single tenant retail business and service stores with a maximum gross floor

area of 50,000 to 75,000 square feet,68 planned commercial centers with 50,000 to 75,000 square

feet for any single tenant and 100,000 square feet per planned center;69 and building supply sales

that have up to 75,000 square feet, excluding outside storage.70

D. City of Roswell

The City of Roswell adapted a big box ordinance in February of 2003, and amended the ordinance in May of 2004.71 The amended ordinance defines big box commercial retail

structures as retail businesses on an individual lot that occupy more than 10,000 square feet.72

No single commercial retail occupant can occupy more than 65,000 square feet.73 However, due to the recent annexation of land containing many existing large retail sites, the amended City of Roswell ordinance also provides for the redevelopment of existing big box sites above and beyond the square footage limitations for new structures.74

The City of Roswell got good news in August 2004 when Home Depot announced they would be utilizing the site of a vacant Wal-Mart, Roswell’s biggest vacant box store. Home

Depot said they planned to tear the existing big box down and build a new store on the same site.

However, the news had a downside: this meant that Home Depot would be vacating their current

68 Id. at § 94-167(2). 69 Id. at § 94-167(3). 70 Id. at § 94-167(14). 71 CITY OF ROSWELL, GEORGIA ORDINANCE TO AMMEND THE ZONING ORDINANCE REGARDING BIG BOX STRUCTURES § 10.9 (2004) [hereinafter CITY OF ROSWELL]. 72 CITY OF ROSWELL § 10.9 (3). 73 Id. at § 10.9 (a). 74 Id.

14 Roswell location, leaving another big box store empty.75 Roswell City Council recently

“approved a mixed-use ordinance that sets guidelines for the higher-density developments.”76

When commenting on the ordinance, one Councilwoman said the City didn’t want any more commercial development, and that the amount of Roswell’s commercial development is already three times the national average.77

The City of Roswell ordinance prohibits large expanses of blank walls.78 This requirement can be met through a variety of design options, which are to be reviewed and approved by the Roswell Design Review Board or the Historic Preservation Commission. The

City of Roswell has had no threatened or actual litigation regarding its big box statutes.79

E. City of College Park

In December of 2003, the City of College Park amended its zoning rules to create a

category for “especially large buildings”.80 This big box ordinance applies to new structures

over 30, 000 square feet, as well as to non-conforming existing structures over 15,000 square feet

which are left vacant for at least six months. Additionally, the ordinance sets a retail cap on new

structures over 60,000 feet.81 The College Park ordinance is notable because it is the first

ordinance in Georgia to specify strict design and pedestrian scale requirements for big box

development. Also, it provides for the analysis of local noise and visual impacts, as well as

regional traffic impacts.

75 Paul Kaplan, Home Depot to rehab old Wal-Mart site, THE ATLANTA JOURNAL CONSTITUTION, 12 Aug. 2004, at 1JM. 76 Paul Kaplan, Roswell, property owner ponder development possibilities, THE ATLANTA JOURNAL CONSTITUTION, 2 Jul. 2006, at 11ZG. 77Id. 78 Supra note 71, at § 10.9 (b). 79 Telephone interview with Jean Marshall, paralegal, City of Roswell, Georgia (October 12, 2004). 80CITY OF COLLEGE PARK, GEORGIA CODE OF ORDINANCE 2003-39(13) (2003). 81 Id. at § 2003-39(13)(a)(1)&(2).

15 The College Park ordinance requires that the facade and exterior walls be designed to

include projections and recessions, o reduce the massive scale and uniform appearance of

traditional big box development.82 Similarly, street frontage must be designed to include

windows, arcades, or awnings for at least 60% of the façade.83 Additional specifications address

the number and variation in rooflines, appropriate building materials and colors, the clear

indication of entryways, and the inclusion of pedestrian scale amenities and spaces.84 Machinery

equipment, outdoor sales, trash collection areas, and parking structure facades must be screened in a manner consistent with the overall design of the building and landscaping.85 Delivery and loading areas must be designed so as to minimize visual and noise impacts.86 Submission of a

noise mitigation plan is required.87

A landscape buffer, which includes canopy trees, is required for all sites which adjoin

residential uses or zones.88 Street access is limited to major arterial roads as specified by a

master plan.89 Additional requirements specify that parking areas should be distributed around

large buildings in an attempt to shorten the distance to other surrounding buildings, public

sidewalks, and transit stops.90 Sidewalks must be provided along the full length of any building

where it adjoins a parking lot. Sidewalks must also connect store entrances to transit stops, and to nearby neighborhoods.91 All applicants must also submit a traffic impact study, and an

82 Id. at § 2003-39 (13)(b). 83 Id. at § 2003-39 (13)(c). 84 Id. at § 2003-39 (13)(d),(e)&(f). 85 Id. at § 2003-39 (13)(h),(k),(m)&(n)(1). 86 Id. at § 2003-39 (13)(q). 87 Id. at § 2003-39(13)(u). 88 Id. at § 2003-39(13)(j). 89 Id. at § 2003-39(13)(i). 90 Id. at § 2003-39(13)(n)(1). 91 Id. at § 2003-39(13)(o).

16 outdoor lighting report which provides information on how outdoor lighting will be

accomplished to minimize the impacts on adjacent properties.92

The College Park ordinance addresses the risk of future abandonment by requiring the

submission to the city of a performance bond equal to 110% of the estimated cost of removal of

the structure.93 Such a bond could be utilized to demolish the structure if 70% of floor area of

the structure remains unoccupied for more than six months. The City of College Park has had

no threatened or actual litigation regarding its big box ordinance.94

F. Result of Proposed Big Box Ordinances: Marietta, Forsyth County, and Cherokee County

Several Georgia counties and cities considered the adoption of big box ordinances from

2004 to 2006 with mixed results. Marietta City Council approved an amendment to their zoning

code relating to large retail establishments by a unanimous vote. Their ordinance outlines new

architectural standards for single retailers occupying buildings of more than 40,000 square feet,

requiring the buildings be broken up architecturally or designed with windows, canopies, or

awnings.95

Forsyth County Board of Commissioners passed a “watered-down” big box ordinance. 96

The final ordinance did not include a “controversial” provision that would have required a demolition bond to be paid by developers to fund tearing down abandoned stores.97 (Before the

Forsyth County ordinance passed Wal-Mart submitted a store design that complied with the

92 Id. at § 2003-39(13)(r)&(s). 93 Id. at § 2003-39(13)(w). 94 Telephone interview with Winston Denmark, attorney, City of College Park (October 13, 2004) 95 Staff, Catching up, THE ATLANTA JOURNAL CONSTITUTION, Aug. 17, 2006, at 14J. 96 Bill Johnson, Northside Business: BUSINESS, THE ATLANTA JOURNAL CONSTITUTION, 26 Jan. 2006, at 16JH. 97 Id.

17 proposed new standards. The store had an equestrian theme because of its proposed location

near horse farms.)98

The Forsyth County ordinance was modeled after Peachtree City’s big box ordinance.

The ordinance was prompted by a proposal by Wal-Mart to build a Supercenter near two

subdivisions. Angry homeowners convinced state environmental officials that the construction

plan ignored streams on the property.99 In February 2005 a stop work order was issued while the

Georgia Environmental Protection Division and the developer “talked.”100

A proposed new big box ordinance did not fare so well in Cherokee County. In June,

2006 the County Commissioners tabled a proposed new big box ordinance indefinitely. The

Commission felt the proposed ordinance limited small and medium-sized developments too

much. The Commissioners said they had wanted to regulate only true big box stores, not all

retail. The current Cherokee County Ordinance bans construction of stores measuring over

80,000 square feet on two lane roads or within a half mile of schools.101

IV. Local Bans and Statewide Controls – The Case of California

California has experience with both statewide planning efforts and local municipal efforts to control big box development. The state's size and population make it attractive for big box retail. In 2002 Wal-Mart announced plans to build 40 such centers in California over the next

98 Doug Nurse, Forsyth County: ‘It will be like no other Wal-Mart’, THE ATLANTA JOURNAL CONSTITUTION, 4 Dec. 2005, at 4ZH. 99 Doug Nurse, Forsyth County: Big-box stores become an issue, THE ATLANTA JOURNAL CONSTITUTION, 26 Sep. 2004,at 1ZH. 100 Janet Frankston, Keeping big-box stores in line, THE ATLANTA JOURNAL CONSTITUTION, 14 Feb. 2005, at 4F. 101 Paul Kaplan, Commissioners take little swing at big development, THE ATLANTA JOURNAL CONSTITUTION, 15 Jun. 2006, at 1JQ.

18 four years, each with an average size of 187,000 square feet each.102 However, it has had

difficulty meeting this goal. As of October 2005 there were only six Supercenters currently in

operation in California and five more in development.103 Construction of new stores was slowed

by litigation and opposition from local communities. Locals, concerned by Wal-Mart’s

employment practices, the impact of a new Superstore on the community, and the environmental

impact of the stores, filed lawsuits on the grounds of environmental regulation violations and

passed ordinances that kept Supercenters away.104 Wal-Mart is not likely to back out of plans to

expand their California operations, especially considering that four of Wal-Mart’s top five retail

generating stores are in the state.105

Two of the most publicized fights have been in Contra Costa county and Inglewood.

Contra Costa county banned the Superstore concept altogether.106 County Supervisor John

Gioia, the ban's author, believed that the Supercenter would not be able to generate sufficient revenue to cover the burdens that the store would place on county roads.107 As a result, the ban

prohibited stores that covered more than 90,000 square feet and devote more than 5 percent of the space to nontaxable items, such as groceries, from being located in the unincorporated areas of the county.108 However, in early 2004 Wal-Mart lead a campaign to defeat the Contra Costa

102 Wal-Mart Supercenters Face Resistance, THE DESERT SUN, July 22, 2003, available at . [hereinafter Wal-Mart Supercenters]; see also Sandy Kleffman, County Supervisors Target ‘Super-sized’ Retail Stores, CONTRA COSTA TIMES, June 4, 2003, available at . 103 Pia Sarkar, Defying the Juggernaut, THE SAN FRANCISCO CHRONICLE, 16 Oct. 2005. 104 Id. 105 Id. 106 Supra note 101. 107In passing its ordinance, Contra Costa County Board of Supervisors relied on a study conducted by the San Diego County Taxpayers Association (SDCTA) to support its argument that the Supercenter would harm the community. The SDCTA study “found that an influx of big-box stores into San Diego would result in an annual decline in wages and benefits between $105 million and $221 million, and an increase of $9 million in public health costs… [and] that the region would lose pensions and retirement benefits valued between $89 million and $ 170 million per year….” Id. 108 Id.

19 County ordinance. Although Wal-Mart claims to have no current plans to build in the area covered by the ordinance, the company spent over one-hundred thousand dollars collecting signatures on a petition for a referendum regarding the ban.109 In March of 2004 residents voted

down the ban by a 6 percent margin of victory.110

During that same election, however, votes in Inglewood, California voted down a

measure that would have exempted Wal-Mart from all environmental, traffic and zoning laws in

the low income community.111 Efforts to ban or limit big box retail continue throughout

California. For example, Los Angeles passed an ordinance that requires developers of large

scale retail projects in certain zones to file economic, environmental, and traffic impact reports

with an application for a permit for any store of 100,000 square feet, with at least 10% of the store devoted to the sale of non-taxable goods (groceries and prescription drugs).112 And although Wal-Mart had indicated its development plans do not include San Francisco, the city’s

Board of Supervisors nevertheless passed a ban on stores over 120,000 square feet, with retailers

seeking approval for stores larger than 50,000 square feet required to applied for a conditional

use permit.113

At the state level, California seeks to address the proliferation of big box114 retail stores

through restrictions on financial assistance to retail stores when they seek to relocate. Unless the

legislative body of the local agency to which the relocation will occur offers to the local agency

from which the relocation is occurring a contract for apportionment of the sales tax generated

109 Id. 110 Josh Dubow, Wal-Mart Has Mixed Results in California Votes, USA TODAY, 3 March 2004. 111 Ruth Rose, Merchant of Shame, SAN FRANCISCO CHRONICLE, 3 May 2004. 112 Robert Green, Thinking Outside the Big Box, L.A. WEEKLY, 13-19 August 2004. 113 Adriel Hampton, Supes Restrict ‘Big Box’ Stores, THE INDEPENDENT, 12 May 2004. 114 California defines a big box retail store as any store that is “greater than 75,000 square feet of gross buildable area….” CAL. GOV'T CODE § 53084(f)(1)(West 2003).

20 from the retailer or dealership, 115 local agencies are prohibited from providing financial

assistance to car dealerships, big box retailers, or landlords of either if the tenant is “relocating

from the territorial jurisdiction of one local agency to… another local agency but within the same

market area.”116 If the relocation is occurring within the same market area, the receiving agency

“shall notify the community from which the relocation is occurring of its intent to give financial

assistance."117 They must then send a contract “that apportions the sales tax generated from the

automobile dealership or big box retailer after the relocation between the two local agencies.”118

This is an effort to address cases where big box retailers leave one area for another close by, having negative consequences for the community and nearby businesses left behind. This situation seriously undermines the efforts of those who seek to control the costs of big box development, and makes regional planning that much more difficult.119

V. Other Examples of Controlling Big Box Development

A. Moratorium and Design Regulations – Fort Collins, Colorado

Temporary development controls are an effective way for communities “to maintain the status quo while they review and strengthen their planning and zoning laws.”120 Development

moratoria provide a good illustration of such a temporary development control device. These

moratoria “allow communities to place a temporary halt on new development so that local

115 Id. at § 53084(a). 116 Market area is defined as a “geographical area that is described in independent and recognized commercial trade literature, recognized and established business or manufacturing policies or practices, or publications of recognized independent research organizations as being an area that is large enough to support the location of the specific automobile dealership or the specific big box retailer that is relocating. For automobile dealerships, this area shall not extend more that 40 miles and for a big box retailer, the area shall not extend more than 25 miles. Id. at § 53084(f)(4)(A). 117 Id. at § 53084(c)(1). 118 Id. 119 Richmond, supra note 6, at 563-564. 120 Leslie Tucker, Temporary Development Controls: Smart Growth Tools for Main Street, NATIONAL TRUST FOR HISTORIC PRESERVATION, 1 (2002), available at .

21 officials can examine the impact of proposed development and put measures in place to manage

it.”121 This land use tool allows local planners time to assess the benefits and costs of big box

developments, which include traffic, loss of community character and the displacement of local

businesses.122

In Fort Collins, Colorado, this approach was used after several developers announced

plans to simultaneously develop big box stores in an area the city wished to protect from

sprawl.123 To allow the city planners time to “study the community impacts of the ‘superstore’

phenomenon in more detail and to provide the community with clear and enforceable policies to

mitigate those impacts,”124 the city enacted a six-month moratorium on all big box

developments. The city argued that “the bulk, size, and scale of such superstores present unusual

land-use concerns for the City…. The development of superstores, in the absence of appropriate

regulatory guidelines, may have an irreversible negative impact upon the City.”125 The

guidelines the city subsequently adopted in early 1995 “require a basic level of architectural

variety, compatible scale, pedestrian and bicycle access, and mitigation of negative impacts.”126

These include rules that prohibit long blank walls that discourage pedestrian activity,127 require that display windows, awnings, and other features are required to add visual impact to the store,128 and that sidewalks must link stores to streets, transit stops, building entrances, etc.129

121 Id. 122 Id. 123 Id. 124 City of Fort Collins, Colorado, Design Standards and Guidelines for Large Retail Establishments (1995), available at . 125 Id. 126 Tucker, supra note 83. 127 CITY OF FORT COLLINS, COLORADO CODE OF ORDINANCES § 3.5.4(C)(1)(a)1 (1995). 128 Id. at § 3.5.4(C)(1)(a)2. 129 Id. at § 3.2.2(C)(5)(a).

22 A square footage retail cap was considered by a citizen advisory committee, but this idea

was abandoned in favor of allowing the market to determine store size.130 Today, Ft. Collins has

a Home Depot store measuring 130,000 square feet and a Super Wal-Mart store that measures

208,000 square feet.131

B. Restrictions on Outdoor Display and Storage

Often accompanying big box retail stores is the display or sale of merchandise outdoors,

such as on the sidewalk or even in the parking lot. Unregulated, this display or sale can be

unsightly; it can also interfere with ingress and egress, disturb nearby neighbors, and take up

parking spaces, thus leading to more paved parking than may be necessary.132 Many big box

ordinances address issues such as whether or in what manner such display should be allowed.

Restrictions range from total bans on outdoor display to factors such as limits on display’s square

footage relative to the store, the display’s location on the zoning lot, and sometimes screening

requirements.

In Georgia, Peachtree City restricts certain outdoor displays according to its zoning

districts, but incorporates a detailed plan for permissible and impermissible outdoor displays into

its sign ordinance.133 There is a general ban on outdoor storage or display in a commercial area,

with certain specific exceptions. A permanent, fully enclosed space “reasonably screened from

public view” is allowed, as is a display previously approved as part of the site plan by the

planning commission.134 Displays not extending more than six feet from the primary building

(and not occupying more than twelve feet along an exterior wall) are generally allowed, if they

130 E-mail from Ted Shepard, City of Fort Collins, Colorado, to Matt Roberts, 3L, University of Georgia School of Law (July 10, 2003, 08:52:20)(on file with author). 131 Id. 132 Chris Duerksen and Robert Blanchard, Belling the Box: Planning for Large-Scale Retail Stores, Proceedings of the 1998 National Planning Conference, AICP Press, available at . 133 PEACHTREE CITY, supra note 46, at app. A, art. IX, §908.7 (2005). 134 Id. at §908.7(a)(1-2).

23 meet certain requirements.135 They must not encroach into a required zoning setback or buffer,

or into a landscaped area.136 They may not interfere with pedestrian or vehicle traffic on the site,

and may not be displayed outside for more than 24 consecutive hours; finally, there may be no sign associated with or advertising the merchandise that is legible from off the site.137

However, a temporary use permit can allow nonconforming displays up to four times in a calendar year, for not more than seven consecutive days on a single permit.138 An applicant

submits the display plan to the city planner, who with other city staff reviews the application to

ensure the temporary display will not pose a threat to health, safety, or public welfare.139 There

is no exception to the sign restriction for a temporary use permit.140

Peachtree City’s approach is similar to other ordinances, many of which also provide general restrictions with a permit process for occasional nonconforming displays. LaFayette,

Colorado, for example, bans all outdoor displays without a permit; the permit application explicitly requires more detail than Peachtree City’s, including a sketch outlining location of merchandise, parking access, utilities, hazards, and signs.141 The planning director retains the

right to require additional approval from other officials such as the building inspector or fire

marshal.142 No more than 120 days of outdoor sales per calendar year may be obtained through a

temporary permit.143

Parsippany, New Jersey instead opts for a general permit for regulated “sidewalk sales”

around five major holidays (Presidents’ Day, Memorial Day, Independence Day, Labor Day and

135 Id. at §908.7 (a)(3). 136 Id. at §908.7 (a)(3)(a). 137 Id. at §908.7 (a)(3)(b-e). 138 Id. at §908.7(b)(1-2). 139 Id. at §908.7 (b)(3). 140 Id. at §908.7 (b)(4). 141 LAFAYETTE, COLORADO. DEVELOPMENT AND ZONING CODE § 26-14-15.1. 142 Id. 143 Id.

24 Thanksgiving); no sidewalk-type displays are allowed at other times.144 Holiday displays may

not extend more than 4 feet beyond the building façade or exceed 25 feet in length (or the

building length, if shorter); one temporary sign, maximum sixteen square feet, is allowed.145

Other cities allow displays year-round, but with greater restrictions. For example,

Aurora, Colorado requires that any display be at least 10 feet from any property line.146 Outdoor displays must be “neat and orderly,” not on landscaping, and be at least three feet from the side or 10 feet from the front of the store entry.147 Display space may not be rented out, and it is

limited to ten percent of total gross interior floor area, not to exceed 100 square feet.148

Lancaster, Pennsylvania allows outdoor displays with explicit restrictions on location. All

displays must be approved by the city, and displays are generally not permitted on the front of

any building, or a sidewalk.149 Additionally, a six-foot opaque fence must enclose outdoor

displays, which may take up a maximum of fifteen percent of total store area.150 Like many

ordinances, Lancaster’s ordinance exempts auto, boat, or RV sales lots.151 Lancaster also allows

once-annual sidewalk sales.152

Asheville, North Carolina and Bloomington, Indiana both allow a combination of permitted/permanent uses, and less strict requirements for temporary displays. Asheville permits outright outdoor seasonal displays, and as a conditional use year-round display or storage with

144 TOWNSHIP OF PARSIPPANY – TROY HILLS, MORRIS COUNTY, N.J., §19-26.1 145 Id. 146 BUILDING AND ZONING CODE OF THE CITY OF AURORA, COLORADO, Art. 12, 146-1249. 147 Id. 148 Id. 149 LANCASTER TOWNSHIP ZONING ORDINANCE, ART. XIX, SUPP. REGULATIONS § 1917. 150 Id. 151 Id. 152 Id. at § 1917.6.

25 city approval.153 Bloomington allows permanent outdoor displays, but does not allow them to

encroach on the required setback; however, a temporary display can encroach 10 feet.154

Another approach focuses on the nature of the merchandise displayed. For example,

Beaufort, South Carolina, like many other cities, restricts outdoor displays to typical outdoor items, such as plants, gardening supplies, pottery, bicycles, or cars.155

VI. Conclusion

The rise of big box retail presents a number of serious challenges that can be

addressed by local governments. The use of big box control devices in Georgia should be

expected to continue, especially as many cities are experiencing a problem of “big box blight” in

an increasing number of abandoned and underutilized former big box sites.

While big box stores offer discount princes and a level of variety that few stores can

match, they also are known to have negative impacts on the communities in which they are built.

This in turn has driven an increasing number of local governments to adopt controls to control

the development of these types of retail stores. Retail caps are emerging as a common restriction

placed on big box stores, for they allow local governments to limit the size of the stores. This

can have a tremendous impact on things such infrastructure costs and the sustainability of local

businesses. As should be evident by the use of planning moratoria and renovation requirements,

other tools are emerging to address the wide range of impacts that big box stores can have. The

practical effect of these tools is that they allow each local government to adopt requirements as

they are needed depending on the goals and purposes set out by each city.

153 ASHEVILLE CODE OF ORDINANCES, ART. V, § 16-147. 154 BLOOMINGTON, INDIANA MUNICIPAL CODE, § 804-4. 155 BEAUFORT, SC. UNIFIED DEVELOPMENT ORDINANCE, art. VI, §6.6(F)(1)(a) (2003, revised 2006).

26 Note: This paper is an on-going student project of the Land Use Clinic, supervised by clinical professor Jamie Baker Roskie. Students who have contributed include; Matt Roberts, Brian White, Elizabeth Simpson, Lauren Giles, and Anna Hauser. While this is not meant to be an exhaustive survey of all types of big box regulations in all communities, we do try to stay abreast of developments in Georgia. If you know of community efforts and regulations that should be included, please contact the clinic at (706) 583-0373 or [email protected].

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